New Delhi, December 11
The rise of retail investors in financial markets has sustained the capital formation cycle in India, said Ananth Narayan G, Whole-Time Member of the Securities and Exchange Board of India (SEBI).
Speaking at the session on 'Financing Future Growth' at the Global Economic Policy Forum 2024, organised by the Department of Economic Affairs, Ministry of Finance, and the industry body Confederation of Indian Industry (CII), the SEBI member stated that the significant influx of retail investors in India has had a stabilising effect on the markets.
He added that, in recent years, the ecosystem has done an excellent job of attracting new participants to the capital formation cycle, with the number of investors growing at an accelerating pace.
Data indicated that the increasing participation of retail investors across diverse regions in India reflects their confidence in the stock market.
According to data from the National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL), the number of registered demat accounts in India with holdings has surpassed the 17 crore mark. As of August 31, 2024, the total stood at 17.10 crore.
The SEBI member also pointed out that the volatility of Indian markets has been relatively low, making the country more attractive to foreign investors.
Furthermore, he stressed the importance of monetising existing infrastructure, improving efficiency, increasing transparency, and reducing risk to ensure sustained capital formation in the Indian markets.
He urged the industry to collaborate on areas such as asset valuation and actively participate in advisory committees that consult SEBI as a regulator on "Type 1 and Type 2" errors.