A revised methodology developed by SEBI in consultation with the Reserve Bank of India (RBI) and the Ministry of Statistics and Programme Implementation (MoSPI) has fundamentally changed India's understanding of household savings through securities markets. According to the latest SEBI data, household savings through securities markets rose sharply to ₹6.91 lakh crore in FY2024-25, compared with ₹3.58 lakh crore in FY2023-24 and ₹2.59 lakh crore in FY2022-23. The updated approach, which incorporates actual granular data instead of broad estimates, has materially changed the national savings picture, with the Gross Savings-to-GDP ratio increasing by 47 basis points to 34.94% from 34.47% under the earlier methodology.
The most striking revelation from the revised data is the dominant role of mutual funds in household investment behavior. According to Jimeet Modi, founder and CEO of Samco Group, mutual funds emerged as the biggest beneficiary of changing household preferences, with nearly four-fifths of the ₹6.91 lakh crore invested by households through securities markets in FY25 coming through mutual funds. Primary mutual fund flows alone surged dramatically from ₹1.66 lakh crore in FY23 to ₹5.13 lakh crore in FY25, underscoring the rising role of systematic investing. Modi emphasized that 'MFs have become the primary plumbing' of India's household financial savings, with SIPs now serving as the operating system of India's household financial savings.
Despite the surge in mutual fund investments, the data reveals a paradoxical trend in Indian retail investment behavior that demonstrates market maturation rather than retreat. As reported by The Times of India, 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. Modi explained that this pattern indicates 'not retreat but maturation', with the Indian retail investor 'booking gains on direct stockholdings and outsourcing fresh allocation to professional vehicles'. This structural shift suggests Indian markets are witnessing a transformation 'from a punter market to an investor market' in real time.
The revised methodology represents a significant improvement in data collection and analysis, addressing previous limitations in household investment tracking. The updated framework now includes secondary market investments, REITs, InvITs, Alternative Investment Funds (AIFs), private debt placements and Non-Profit Institutions Serving Households (NPISHs), offering a more comprehensive view of financial savings behavior. Previous estimates relied on assumptions, including attributing 35% of equity public and rights issues and 40% of corporate debt issuances to households, while many investment channels remained excluded. The study utilized granular holdings data of households in depositories along with data published by the Reserve Bank and MoSPI to provide a more robust understanding of investor behavior patterns.
