Indian investors demonstrated a clear preference for long-term stock ownership in FY26, with delivery-to-traded quantity and value ratios rising to around 30% in the cash market, according to the Sebi Annual Report 2025-26. This shift mirrors the approach advocated by market veterans like Warren Buffett, who emphasizes that real wealth is built through owning good businesses during volatility rather than chasing short-term moves. The higher delivery ratios indicate that investors are increasingly buying shares for holding rather than just trading for short-term price movements, with delivery trades moving into investors' demat accounts while intraday trades are squared off within the same day. As per Sebi, this pointed to an improvement in the quality of market participation and showed a growing preference for asset ownership over speculative intraday activity.
The shift occurred despite challenging market conditions, as the Nifty corrected 15.2% from its record high of 26,328 reached in early January 2026 due to geopolitical tensions in the Middle East. The index ended FY26 with an annual decline of 5.1%, while in dollar terms, the fall was steeper at 13.9%, hurt by both market weakness and a sharp fall in the rupee. Total exchange turnover in the cash equity segment fell 6.8% to ₹280 lakh crore in FY26, with the moderation influenced by valuation concerns and a shift in retail savings toward safe-haven assets such as gold and silver. According to Sebi, this reflected healthier participation and greater resilience amid foreign investor outflows.
The deeper holding behavior aligns with broader retail trends, as total demat accounts rose to 22.5 crore supported by simpler digital onboarding and mobile trading apps offered by discount brokers. Domestic institutional investors acted as major shock absorbers, recording net inflows of ₹8.5 lakh crore in FY26, helped by steady mutual fund SIP flows. Their equity ownership rose to an all-time high of 17% by March 2026, while foreign portfolio investor ownership dropped to a 15-year low of 15.8%. The message from FY26 is clear - Indian investors did not disappear when markets turned volatile. Many traded less aggressively, bought more for delivery and kept money flowing through domestic institutions, behaving more like owners than punters.
The shift away from short-term speculation was also visible in derivatives markets, with options contract volumes falling 51.5% after Sebi tightened rules through larger contract sizes, rationalized weekly expiries, upfront premium collection and higher securities transaction tax. These regulatory changes aimed to reduce speculative activity and encourage more sustainable market participation, contributing to the overall trend toward longer-term investment strategies. The regulatory framework changes were designed to make derivatives trading more disciplined and aligned with fundamental market movements.
