Why more and more individual investors in India are investing in stock market

Declining saving avenues amidst the low interest rate regime has led to greater interest by individuals in the stock market: SBI report

2 min read . 10:51 AM ISTLivemint

The retail participation in Indian stock markets is rising, says a SBI report, pointing out that 44.7 lakh retails investor accounts have been added during the two months of this fiscal. The number of individual investors in the market has increased by a whopping 142 lakh in FY21, with 122.5 lakh new accounts at CDSL and 19.7 lakh in NSDL, the report said. Also, the share of individual investors in total turnover on stock exchange has risen to 45% from 39% in Mar’20, as shown by NSE data.

With the onset of pandemic and subsequent lockdown, household financial savings showed a significant jump in Q1 FY21, and then a sharp moderation in Q2 FY21, says the SBI report. "However, the data shows that currency in circulation again increased in Q3 and Q4 FY21 with incremental amount of ₹80,501 crore and ₹95,181 crore respectively compared to ₹17,225 crore in Q1. Furthermore, the markets have progressively improved with Sensex increased from 28,265 at the beginning of Apr’20 to above 52,000 now. This has led to increased investment in stocks and mutual funds in H2 FY21," it said.