40 mn new households to enter securities market—driven by 'high returns'

India’s securities market could see nearly 40 million households make their first investment over the next 12 months, according to the Securities and Exchange Board of India’s (Sebi) Investor Survey 2025.

While the study shows that 63% (213 million households) of the total 337.2 million households are aware of at least one securities market product (such as mutual funds, exchange traded funds, shares, futures & options (F&O), real estate and infrastructure investment trusts, bonds, or alternative investment funds), participation is still low, with only 9.5% (32 million households) actively investing. Urban households demonstrated greater involvement, with participation at 15% compared to just 6% in rural areas. Among states and cities, Delhi recorded the highest participation at 20.7%, followed by Gujarat at 15.4%.

The bigger opportunity for market intermediaries lies in 53.5% of households (180 million) who are "aware" but not currently invested. Of this group, 22% (nearly 40 million households termed as “intenders” in the survey) are looking to invest within a year, while the remainder (78%) are on the sidelines for now.

But here’s the “deflator.”

The survey is based on 90,000 households across 400 cities and 1,000 villages, with 70% urban and 30% rural representation. In other words, the findings have been extrapolated to a projected 337.2 million households, which is higher than the Census 2011 estimates of 248.3 million households, and MOSPI data of 294.3 million households in FY23.

But while the numbers may be “representative” and not “descriptive” of actual households, what’s more important about surveys is the underlying takeaways.

Interestingly, while capital preservation is a priority for 80% of all the households surveyed, the survey reveals just 36% of investors have high to moderate knowledge about the securities market. Even among segments with the highest penetration, nearly 50% of investors have low knowledge – indicating a need to educate even the segments that have relatively high penetration, mentions the survey.

Though fear of losing money in the markets in non-investors is the highest, 73% of this cohort are ready to invest if access is “convenient”. But the bigger worry is that of the 22% non-investors who intend to invest, 74% have cited “high growth potential” as the trigger for investing with 50% of this cohort expecting “potential for higher returns” and “quick gains with small investments”. Ony 41% are looking at investing either from building wealth over time or to achieve defined financial goals.

Interestingly, despite Sebi’s studies showing that most retail investors lose money in futures & options (F&O), the 2025 survey still finds F&O among preferred segments, with investors emphasising ease of process for mutual funds, stocks, and F&O, while cost efficiency matters more for F&O, stocks, and AIFs

The findings also underline the need for targeted investor education. Gen-Z respondents showed a preference for short-form videos and reels, while older groups leaned towards articles, podcasts, and workshops. Across all age segments, there is a strong demand for regional language financial education, making inclusiveness critical for market expansion.