Household savings via securities market double to ₹6.91 lakh crore in FY25; four-fifths flow via mutual funds

India’s household savings flowing through the securities market nearly doubled to ₹6.91 lakh crore in FY25, driven overwhelmingly by mutual funds, even as retail investors continued to pare direct equity holdings, according to a research paper authored by Sebi officials.

As per the data compiled in the paper, total household savings through the securities market rose from ₹3.58 lakh crore in FY24 to ₹6.91 lakh crore in FY25, compared with ₹2.59 lakh crore in FY23.

The surge was led by primary market mutual fund inflows, which jumped to ₹5.13 lakh crore in FY25 from ₹2.85 lakh crore in FY24 and ₹1.66 lakh crore in FY23. Overall primary market flows climbed to ₹6.31 lakh crore in FY25, almost doubling from ₹3.57 lakh crore a year ago.

The paper, authored by Prabhas Kumar Rath, Shyni Sunil and Kalyani H,  noted that households remained net sellers in the secondary equity market for the third consecutive year. Net outflows from direct equity investments stood at ₹54,786 crore in FY25, after net selling of ₹69,329 crore in FY24 and ₹27,684 crore in FY23.

Secondary market flows overall, however, improved sharply to ₹59,452 crore in FY25 from just ₹818 crore in FY24, aided by higher debt market participation and increased ETF allocations.

Debt instruments also attracted strong household participation. Combined primary and secondary debt flows stood at over ₹1.04 lakh crore in FY25, reflecting growing appetite for relatively stable fixed-income products amid volatile equity markets.

Alternative investment avenues such as REITs and InvITs continued to see gradual traction, though their contribution remained modest compared with mutual funds and debt products.

Retail investing behaviour shows structural evolution

According to Jimeet Modi, founder and chief executive officer of Samco Group, the trend signals a structural evolution in retail investing behaviour rather than a retreat from equities.

“The most interesting number in this report isn't the headline. It is the fact that households were net sellers of direct equity to the tune of ₹54,786 crore in FY25 — and ₹69,329 crore the year before — even as they were record buyers of mutual funds. This is not retreat. This is maturation,” Modi said.

He added that Indian retail investors are increasingly booking gains in direct stocks while shifting fresh allocations towards professionally managed investment vehicles.

“At least in the equity cash markets, we are watching the structural shift from a punter market to an investor market unfold in real time, on a national balance sheet,” he said.

Modi noted that mutual funds have effectively become the “primary plumbing” of household financial savings in India.

“Of the ₹6.91 lakh crore households put into securities markets in FY25, roughly four-fifths flowed through mutual funds. Primary MF flows alone tripled — from ₹1.66 lakh crore in FY23 to ₹5.13 lakh crore in FY25. SIPs are now the operating system of India's household financial savings,” he said.

The trend reflects growing participation of retail investors in India’s capital markets, with 235 lakh demat accounts added till December 2025, taking the total number of accounts beyond 21.6 crore. The mutual fund industry also expanded during the period, with 5.9 crore unique investors as of December 2025. Of these, 3.5 crore investors (as of November 2025) were from non-tier-I and tier-II cities, highlighting the deepening penetration of market-linked investments beyond major urban centres, as per the Economic Survey 2025-26.