Direct equity investors take money off table in 2025, a first since Covid

Sell shares worth nearly ₹8.5K cr so far as markets remain choppy

The post-Covid euphoria surrounding direct equity investing has ebbed in 2025. Individual investors have turned net sellers in the domestic equity market, pulling out about ₹8,461 crore so far this year — a sharp reversal from the record purchases seen in 2024, according to a report by the National Stock Exchange of India (NSE). 

Between 2020 and 2024, direct equity investments had remained firmly in the green. 

The scaling back of direct equity purchases by individual investors coincides with a change in equity market dynamics. This calendar year has been tumultuous for markets. While the first few months saw the continuation of the correction that began in September 2024, the remainder of the year has been marked by a recovery punctuated by bouts of volatility. 

The Nifty 50 index, despite rising nearly 11 per cent in 2025, remains at its September 2024 level. Broader market indices, which suffered a sharper decline after September 2024, remain well below their record highs. 

As direct investing becomes more challenging, retail investors are increasingly opting for structured avenues to deploy their investible surplus, according to experts. 

“This shift (direct equity investments turning negative) should not be seen as a loss of confidence in India’s growth story, which continues to remain strong, supported by healthy economic indicators and improving corporate earnings,” said Feroze Azeez, joint chief executive of Anand Rathi Wealth. “Instead, it reflects the steady movement of household savings towards more formal and professionally managed investment avenues.”

 

Mutual fund inflows, particularly through systematic investment plans, have remained buoyant in 2025. As of November, SIP inflows this year stood at a record ₹3.04 trillion, up sharply from ₹2.69 trillion in 2024.

 

These SIP inflows, along with lump-sum investments, emerged as key supports for the market in 2025 as foreign institutional investors and direct equity investors pulled money out. According to the NSE report, domestic institutional investors invested more than ₹7.6 trillion in equities this year, up sharply from ₹5.3 trillion in 2024. Mutual funds’ net equity purchases as on November 30 were at a record ₹4.6 trillion. 

Experts also point to heightened investor interest in initial public offerings, along with the rally in gold and silver, as factors that have weighed on direct equity investments. “CY24 delivered phenomenal returns for retail investors, particularly in midcap and smallcap stocks. This year saw profit-booking,” said G Chokkalingam, founder of Equinomics. “There was also a boom in the IPO market and a bull run in gold -- so a lot of money shifted from the secondary market to these avenues.”

 

The cooling trend in direct investing has also been reflected in demat account openings. In the first 11 months of 2025, demat accounts grew by 28 million, compared with 46 million additions in 2024.