Domestic investors pour Rs 4.5 lakh crore into markets this year as household savings shift to equities: NSE Report

MUMBAI: Domestic investors have invested approximately Rs 4.5 lakh crore in the equity markets through mutual funds and other indirect channels this year, reflecting a steady shift in household savings toward market-linked assets, according to a report by the National Stock Exchange (NSE).

The report highlighted that the post-pandemic expansion of India’s retail investor base has gathered strong momentum. The number of individual investors has risen sharply from around three crore in 2019 to over 12 crore in 2025. This growth has been accompanied by increasing participation through both direct equity investments and indirect routes such as mutual funds.

Since 2020, cumulative household investments in market-linked instruments have reached Rs 17 lakh crore, underscoring a structural change in savings behaviour. It stated, “Expansion of individual investors — from approx. 3 crore investors in 2019 to over 12 crore in 2025 — is now accompanied by rising household savings toward market-linked assets, with nearly Rs 4.5 lakh crore invested this year”.

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In contrast, foreign portfolio investor (FPI) interest remained weak through the year, with overseas investors continuing to pare exposure to Indian equities. The report noted that domestic participation has increasingly offset the impact of volatile foreign flows, helping markets absorb external shocks.

Primary markets reflected this domestic strength. After a record year in 2024, capital raised in 2025 has already surpassed previous peaks, highlighting the Indian market’s ability to intermediate capital even amid global uncertainty. The report also mentioned that strong retail and institutional domestic participation has supported fundraising activity despite challenging global conditions.

Trade uncertainty emerged as a defining global feature during the year. India faced sharply higher tariffs on exports to the United States, with duties rising by an additional 50 per cent, even as negotiations toward a bilateral trade agreement continued. These trade disruptions weighed on corporate earnings and capital flows in the early part of the year.

However, the report noted that the volatility also created room for adjustment. Domestic investors absorbed market swings, corporate earnings recovered by the September quarter, and improving financial literacy contributed to more stable and longer-duration investment flows.

At the same time, investment indicators pointed to a strengthening capital expenditure pipeline, signalling improving medium-term growth prospects. The resurgence in gold prices, however, reflected persistent global and geopolitical uncertainty.

The Nifty 50 index rose 10.2 per cent year-to-date, reflecting modest gains amid global headwinds but improved internal market stability. (ANI)