Amid retail pullback, proprietary firms gained as trading softened in 2025

Retail investors stepped back in 2025 as trading volumes softened, allowing proprietary desks and institutions to gain market share on the NSE

With trading activity seeing moderation in 2025, investor participation witnessed a sharp reshaping, with proprietary traders and institutions gaining ground as retail investors stepped back, according to a Market Pulse report published by the National Stock Exchange (NSE).

 

In the cash equity segment, the average daily turnover (ADTV) fell 15 per cent year-on-year (Y-o-Y) to ₹99,622 crore on the NSE during 2025. This came as retail investors reduced trading intensity and diverted capital towards primary market issuances and mutual funds.

 

Monthly average investor count fell from 14 million in 2024 to 12 million in 2025. On the other hand, ADTV for exchange-traded funds (ETFs) jumped nearly 80 per cent to ₹2,510 crore.

 

The retail investor retreat allowed proprietary trading desks to increase their dominance. Their share of cash-market turnover rose for the third consecutive year to a 21-year high of 29.8 per cent on the NSE, data showed.

 

By contrast, individual investors’ share of cash-market activity fell to a decade-low of 33.5 per cent, reflecting a more risk-averse stance amid volatile markets.

 

NSE data showed that individual investors accounted for nearly 43 per cent of the overall contraction in cash-market turnover in 2025, underscoring the extent of their pullback.

 

Even proprietary traders, despite their record share, contributed about 24 per cent to the decline in turnover, highlighting that the slowdown was broad-based.

 

Institutional investors, however, moved in the opposite direction. Domestic institutional investors (DIIs) increased their share of cash-market turnover to a record 14.2 per cent, supported by steady systematic investment plan (SIP) inflows into mutual funds.

 

Foreign portfolio investors (FPIs) maintained a stable presence, with their share edging up to around 15 per cent, broadly in line with long-term averages.

 

Corporate participation continued to shrink, falling to an all-time low of 3.7 per cent and remaining below 5 per cent throughout the year. This reinforced the shift in activity towards proprietary desks and institutions.