Household savings routed through the securities market experienced a dramatic surge to ₹6.91 lakh crore in FY25, representing a substantial increase from ₹3.58 lakh crore in the preceding fiscal year, according to a research paper authored by Sebi officials. The revised estimate is significantly higher than the ₹5.43 lakh crore that would have been recorded under the earlier methodology. As reported by CNBC TV18, household savings channelled through the securities market form a crucial component of financial savings and are emerging as an attractive alternative to traditional assets like gold and real estate. The study reveals that this represents a ₹1.5 lakh crore increase over the previous estimates, indicating that India's post-pandemic retail investing surge may be much larger than previously understood. The revised methodology has also revealed that household savings through securities markets reached 2.17% of GDP in FY25, compared with 1.71% under the earlier methodology, suggesting that India may have been underestimating household wealth all along.
The study examines a methodological shift in computing household savings through the Indian securities market undertaken by Sebi in consultation with the Reserve Bank of India (RBI) and the Ministry of Statistics and Programme Implementation (MoSPI). According to the research paper, the new methodology uses actual granular data from depositories, stock exchanges and the Association of Mutual Funds in India (AMFI) to capture household investments across a broader range of instruments and market segments. The revised approach includes Non-Profit Institutions Serving Households (NPISHs), such as trusts, societies and charitable organisations, in addition to individual investors. As noted by Sebi, the revised methodology now captures a broader set of investments including secondary market participation, REITs, InvITs and private placements, offering a more realistic picture of household participation in capital markets. The framework now captures household participation in equity, debt and other market segments beyond first-time issuances, and expands coverage to include new-age financial instruments such as Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), Alternative Investment Funds (AIFs), municipal bonds, securitized debt instruments and security receipts. The methodology also incorporates Non-Profit Institutions Serving Households (NPISHs) into household-linked investor classifications, providing what regulators describe as a more realistic picture of household savings behavior.
Primary market investments accounted for ₹6.32 lakh crore in 2024-25, led by mutual funds at ₹5.13 lakh crore and equity issuances at ₹95,139 crore - more than double the ₹46,879 crore recorded in FY24. Secondary market investments contributed ₹59,452 crore during the year, supported by net investments in debt securities, exchange-traded funds, REITs and InvITs. According to the Sebi research paper, household mutual fund holdings climbed to ₹44.39 lakh crore at the end of FY25 from ₹36.28 lakh crore a year earlier and ₹24.45 lakh crore in FY23. The value of household equity assets increased to ₹88.92 lakh crore in FY25 from ₹84.07 lakh crore in FY24 and ₹53.67 lakh crore in FY23. Secondary market mutual fund flows, including ETFs, also rose sharply to ₹30,885 crore in FY25 compared with ₹9,783 crore in the previous year. The study also attempted to estimate the total stock of household financial assets held through Indian securities markets, revealing that household assets in securities markets stood at ₹141.34 lakh crore by FY25, with equities accounting for the largest component at ₹89 lakh crore and mutual fund holdings at ₹44.4 lakh crore.
Indian households demonstrated a structural shift in FY25, with ₹54,786 crore pulled from secondary equities while equity investments witnessed strong traction in the primary market. As reported by Sebi, this indicates investors likely booked profits amid valuation concerns and heightened volatility. In contrast, household flows into equities through IPOs, FPOs, rights issues and preferential allotments rose to ₹95,139 crore in FY25 from ₹46,879 crore in FY24. The Sebi article emphasized that the growing appetite for mutual funds was visible in the stock of household assets, with mutual funds becoming the primary channel for household financial savings. Nearly four-fifths of the ₹6.91 lakh crore invested in securities markets in FY25 flowed through mutual funds, with secondary market mutual fund flows standing at ₹30,885 crore compared with ₹9,783 crore in the previous year. The study reveals that despite the huge equity market participation since COVID, net household investments in the secondary equity market remained negative, with flows standing at -₹27,684 crore in FY23, -₹69,329 crore in FY24 and -₹54,786 crore in FY25, indicating that households were actively booking profits or reallocating capital even as participation surged. Primary market mutual fund inflows jumped from ₹1.66 lakh crore in FY23 to nearly ₹5.13 lakh crore in FY25, suggesting the transition from speculative direct stock trading towards more systematic and diversified investing through managed products.
The methodology revision alone lifted India's gross savings-to-GDP ratio by 47 basis points in FY25, according to the study. The authors argued that the country's statistical framework had failed to fully account for the changing nature of retail investing, with traditional estimates relying on simplified assumptions that significantly undercounted actual household participation. Jimeet Modi, Founder and CEO of SAMCO Group, noted that "The Indian retail investor is booking gains on direct stockholdings and outsourcing fresh allocation to professional vehicles. At least in the equity cash markets, we are watching the structural shift from a punter market to an investor market unfolding in real time, on a national balance sheet." The study concludes that replacing estimates with granular actual market data provides a more accurate and comprehensive measure of household savings, better reflecting the shift from physical assets to financial investments. The inclusion of new instruments and segments has provided comprehensive coverage and better captures the shift in household savings from traditional physical assets like gold or real estate toward financial instruments, offering policymakers a more realistic picture of household balance sheets, financialization trends and the growing role of domestic capital in funding economic growth. Despite the rise in market investments, Indian households continue to favor physical assets, with real estate, gold and other tangible assets still accounting for nearly two-thirds of household savings.
