India's capital markets have demonstrated remarkable resilience despite facing an exceptionally challenging environment over the past few years, including geopolitical tensions, tariff uncertainties, energy price shocks, supply chain disruptions, AI-led technological changes and foreign portfolio investor outflows, according to Sebi Chairperson Tuhin Kanta Pandey at the ET Now Markets Summit 2026. As per ET Now, Pandey noted that Indian capital markets have been facing one challenge after another over the last couple of years. Tariffs, price and supply shocks on oil and gas due to the war in West Asia, AI disruptions and FPI outflows. Yet, capital formation has continued. India's capital markets helped raise more than ₹1.5 lakh crore during April and May of the current financial year, underlining continued investor confidence despite heightened volatility across global markets. Of the total funds raised, around ₹70,000 crore came through equity issuances while nearly ₹86,000 crore was mobilised through corporate bonds.
The transformation of India's capital markets has been most evident in the dramatic surge in SIP contributions, which have climbed from ₹43,921 crore in FY17 to a record ₹3.50 lakh crore in FY26, marking an almost eightfold increase in just nine years. After reaching ₹2.89 lakh crore in FY25, SIP contributions crossed the ₹3 lakh crore mark for the first time in FY26, as reported by AMFI data. The demat account revolution has been equally remarkable, with the number crossing 22 crore today from fewer than three crore in March 2013. This expansion has been driven by digital onboarding, lower transaction costs, smartphone penetration and the rise of discount brokerages, with the Covid-19 period proving to be a turning point as millions of first-time investors entered the market during and after the pandemic. Systematic Investment Plan (SIP) assets now account for nearly 20-21% of the mutual fund industry's total assets as of May-end 2026, with the SIP stoppage ratio declining to 95% after remaining above 100% for two consecutive months, as reported by ET Now.
Despite recent moderation in primary market activity, the IPO pipeline of around ₹1.5 lakh crore remains robust for the coming months, according to Pandey at the ET Now Markets Summit 2026. While primary market activity has moderated in recent months, the pipeline for new listings remains healthy, as reported by ET Now. The investor base has expanded to around 145 million investors in the securities market, growing at more than 20 per cent annually. Market capitalisation has risen from about 69 per cent of GDP a decade ago to nearly 128 per cent currently, despite recent market corrections, as reported by Business Standard. India's stock market value has more than quadrupled since 2013, with total market capitalisation rising from just $1.14 trillion in 2013 to nearly $4.84 trillion currently, according to CNBC TV18.
India has demonstrated remarkable resilience amid global uncertainties, with Sebi Chief Tuhin Kanta Pandey highlighting that the country stands out for its resilience during uncertain times. As per The Times of India, Pandey noted that India remains one of the fastest-growing major economies, with growth estimated at 7.7% in FY26, though there is some moderation expected in FY27 growth estimates to 6.6% due to headwinds. The growth story is anchored in domestic consumption demand, strong government investments and improving private sector participation, making India relatively better positioned compared to many global economies. Pandey emphasized that India's growth story is not just about economic expansion but about formalisation, financialisation of savings, and importantly, trust in institutions. The SEBI chief noted that while India remains open to global capital flows, the market today is significantly better positioned because of its stronger domestic investor base, as reported by ET Now.
India can create significant economic value by deploying artificial intelligence to solve real-world problems in healthcare, education, and banking, according to recent developments. While the nation is behind in AI and chip manufacturing, the country is making progress with future plans aiming for advanced chip production. Investment in research and deep technology is crucial for growth, as highlighted in a significant push towards building a future-ready workforce for Viksit Bharat 2047. Union Commerce Minister Piyush Goyal inaugurated a series of skill development, AI-enabled employment and industry-led training initiatives in Mumbai, underscoring the critical role of youth, technology and partnerships in shaping India's growth story.
Despite growth in passive investing due to lower costs and increasing awareness, India's passive penetration in the retail segment remains significantly lower than developed markets, leaving meaningful opportunities for active management. Active fund managers generate higher alpha through sector rotation opportunities, asset allocation decisions, stringent risk management capabilities, and identifying emerging businesses before they enter benchmark indices. At Bank of India Mutual Fund, the strategy focuses on thorough research and structured, repeatable processes to deliver consistency across market environments. As per Ananya Chaudhuri, a majority of the outcome within the under researched universe of mid and small cap businesses suggest stronger alpha creation opportunities with high risk-reward.
As of April 30, 2026, Bank of India Mutual Fund manages over ₹15,300 crore in assets under management with approximately 8.59 lakh investor folios across 22 open-ended and two close-ended products. The Bank of India Flexi Cap Fund and Bank of India Small Cap Fund have seen good investor interest, reflecting demand for diversification and growth opportunities. The fund house has also attracted interest in its unique Aggressive Hybrid Category offering - the Bank of India Mid & Small Cap Equity & Debt Fund with volatility control through fixed-income investments. As per Ananya Chaudhuri, the fund house has seen good interest from distribution partners and investors towards this unique offering.
For investors starting SIPs in 2026, market volatility can become an opportunity to accumulate more units during market corrections rather than a risk. The biggest risk is often discontinuing investments during temporary market declines. Investors should maintain a balanced approach with 40-65% equity investments in large-cap funds and allocate smaller portions to mid- and small-caps for higher growth opportunities. Those with long-term horizons of 5-10 years can consider higher exposure to mid- and small-cap funds while maintaining diversification, as reported by Business Standard. For typical long-term retail investors, a simple approach may be to put regular monthly investments of around 50-65% of savings in equity mutual funds, 25-35% in safer options like fixed deposits or debt funds, and 10-15% in gold.
