Sebi chairman Pandey flags low market participation despite rising investor awareness

Despite a sharp expansion in India’s securities market over the past decade, awareness has not translated into participation, with only 9.5% of households investing in securities-market products, Sebi Chairman Tuhin Kanta Pandey said on Monday. 

Speaking at Panjab University during the launch of Project Jagrook, Pandey said a recent Sebi investor survey showed that 63% of households were aware of at least one securities-market product, but only a small fraction participated. The survey also found that just 36% of investors had high or moderate knowledge of the securities market. 

“There is a clear urban-rural divide,” Pandey said, noting that participation stood at 15% in urban India compared with just 6% in rural India. 

Sebi targets investor education gap 

Pandey said the findings underline the need to take investor education directly to potential investors instead of expecting them to seek out information themselves. “Do not wait for the investor to come to investor education. Take investor education to the investor,” he said. 

Project Jagrook brings Sebi, stock exchanges, depositories, the Association of Mutual Funds in India (AMFI) and the National Institute of Securities Markets (NISM) under a coordinated investor-education framework. 

The initiative will focus on simplifying market concepts, explaining investment risks and expanding financial literacy through television, print, radio, cinema, outdoor media, digital platforms, social media, OTT and WhatsApp. 

The campaign will be rolled out in English, Hindi and 11 regional languages, with sustained communication planned through March 2027. 

The survey also highlighted a major gap in the reach of investor-awareness programmes. Fewer than 1% of respondents had attended such programmes, although 91% of those who had attended found them useful. 

Awareness of Sebi’s investor-centric initiatives was also low. Only 6% of respondents were aware of the regulator’s grievance-redressal mechanisms, although 88% of those who had used them were satisfied with the outcome. 

Capital market participation surges 

Pandey said the need for greater investor education comes against the backdrop of a dramatic expansion in India’s capital markets. 

Market capitalisation has risen from ₹95 lakh crore in FY16 to around ₹472 lakh crore currently, while mutual fund assets under management have increased from ₹12 lakh crore to around ₹87 lakh crore over the same period. 

The number of demat accounts has risen to 23.8 crore, while unique investors have increased to 15.1 crore, growing at around 20% annually. Household flows into securities-market instruments stood at around ₹7 lakh crore in FY24-25. 

Pandey highlighted reforms across public markets, market infrastructure, corporate bonds, mutual funds, REITs and InvITs, commodity derivatives, foreign portfolio investors, portfolio management services, and alternative investment funds. He said India had become the first major market to move to T+1 settlement and had introduced interoperability between clearing corporations. The corporate bond market has also expanded, with outstanding corporate debt now at around ₹61 lakh crore. 

Focus on students and rural investors 

Project Jagrook will also take investor education into universities through the Mentoring of University and College Students through Trainers (MUST) programme. Under the initiative, teachers, staff, and senior students will be trained as partner trainers. 

For rural India, Sebi plans to work with the Ministry of Panchayati Raj, state governments, and local citizen-centric channels to spread financial literacy, awareness of regulated investment products, and fraud-prevention messages. Pandey also urged investors to follow five basic principles: avoid investment frauds and unregulated tips, invest only in products they understand, start early and remain invested, diversify and not assume that fixed returns are risk-free. “Do not invest because someone told you to. Do not invest because everyone else is investing. Invest, because you understand,” Pandey said. 

He said investor education should be treated as part of market infrastructure alongside exchanges, clearing corporations and depositories. “Access alone is not enough. Investors must also be informed,” Pandey said, adding that the central message of Project Jagrook was “Samajh Se Investing Simple.”