Individual investors now own 18.7% of the Indian equity market, marking the highest share in more than two decades according to a new EY India report. This milestone represents a significant shift in market participation, with the report highlighting that individual ownership has reached a multi-decade high. The achievement comes as India continues to demonstrate strong growth in digital financial access, creating new opportunities for sustained market participation. However, recent market performance shows the challenges of concentrated equity exposure, with the Nifty 50 declining over 10% from 25,939 in September 2024 to 22,780 by September 2026.
AI could democratize financial advice across India, making personalized investment guidance accessible to diverse investors including women and younger generations. According to EY India's latest report, artificial intelligence could significantly reduce the cost of providing personalized financial advice, making tailored investment guidance more affordable for a much wider pool of investors. The report notes that AI can automate routine tasks such as financial profiling and risk assessment, allowing human advisors to focus on complex decisions, major life events, behavioral coaching and client interactions where the human element remains important. Predictive AI can strengthen customer diagnostics, identify emerging needs, detect behavioral patterns and anticipate life-stage transitions, while generative AI can deliver personalized financial education and multilingual engagement tailored to individual circumstances. AI can add an advice layer to India's digital public infrastructure (DPI) by using customer data to provide more personalised goals, recommendations and explanations at scale, as highlighted in the latest EY report.
Gen Z investors under 30 years of age now constitute 38% of the investor base, up dramatically from 23% in FY19, according to EY India's latest report. This demographic shift represents a fundamental change in India's investment landscape, with younger investors driving the next phase of wealth creation. The report notes that much of the expected growth will be driven by Gen Z and millennial cohorts, whose investment behavior is characterized by digital-first engagement, greater familiarity with financial products, and a stronger orientation toward long-term wealth accumulation. Technology emergence, improved financial literacy, regulatory reforms, and strong market performance have all contributed to this surge in younger investor participation.
Despite the record ownership levels, India's digital financial ecosystem shows a stark disparity between access and actual investment participation. The country has over 550 million active UPI users, yet only about 62 million invest in mutual funds and roughly 50 million participate in equities. EY projects that more than 100 million additional long-term investors could enter the market by 2035 if access is converted into sustained participation, indicating significant untapped potential in India's digitally connected households. The gap is no longer primarily about access to financial infrastructure, as many households are financially connected, economically capable and digitally active, but remain under-invested because market-linked products feel complex, volatile, unfamiliar or difficult to evaluate. Limited access to trusted advice and guidance suited to their financial goals can also make potential investors hesitant to take the first step towards equities and mutual funds.
The next wave of market participation is already visible beyond traditional financial centers, with cities beyond the top 110 now contributing 12% of mutual fund AUM in FY25. Districts beyond the top ten accounted for 70% of NSE-registered investors who traded during the year, up from 61% in FY21. Women investors have shown remarkable growth, rising to 25% from 20% in B30 cities over the same period. According to EY's latest report, 'Wealth Inclusion in India: Expanding Investor Participation Beyond Metro India', Tier-2 and Tier-3 salaried households, women, young professionals and Gen Z investors are identified as key groups that could drive the next phase of wealth creation. Agentic AI can orchestrate investment journeys and automate servicing interactions, while maintaining the trust and accountability that remain central to financial advice. The report emphasizes that the focus should move beyond simply making investing easier or faster towards making it easier to understand, suitable and sustainable, while maintaining transparency and investor protection.
SIPs have become the primary vehicle for individual investment, now accounting for 35% of individual mutual fund AUM, nearly double the 19% share in FY19. The report notes the emergence of micro-SIPs of about $2.6 and distribution tie-ups covering more than 250,000 rural touchpoints are successfully attracting first-time and underserved investors. Investable household assets have reached nearly $5.2 trillion in FY25, with EY projecting that individual mutual fund AUM could cross $3 trillion by 2035, while direct equity holdings are expected in the $2.5–3 trillion range. Demat accounts have increased about 5.5 times since the pandemic to more than 230 million, while the number of unique registered investors on the NSE has crossed 130 million. India's digital public infrastructure (DPI) has transformed the economics of financial inclusion by making identity verification, digital payments and financial data sharing easier, with Aadhaar, UPI and Account Aggregator creating the digital rails that can now be extended to investing. The report argues that product-led growth must evolve into outcome-led participation, digital access must become guided access, and investor education must move beyond awareness and toward measurable financial capability.
