Retail rush: Keeping faith in markets

The surge in retail participation, combined with increasing market complexity, poses new challenges for the Sebi

Retail participation in Indian capital markets has exploded since 2020-21. The number of demat accounts, at over 150 million, is 275 per cent higher than the figure as on April 1, 2020. The proportion of individuals’ trading on the stock exchanges in the cash segment is around 40 per cent. The individuals hold about 10 per cent of market cap in listed companies. This translates into wealth of about Rs 40 trillion. In addition, the individuals have substantial holdings through mutual funds.

The reasons for this sudden interest in capital markets include unusually low interest rates during 2020-22, resulting in negative