Equity Holdings Soar
Indian households have demonstrated a substantial commitment to equity markets, injecting approximately ₹10 trillion into their holdings during the first
nine months of the fiscal year 2026. This significant influx has propelled the total value of household equity ownership to an impressive close of ₹88 trillion. This growth trajectory is not a new phenomenon; since March 2020, there has been an annualized growth rate of 34.2 percent in these holdings. The period between April 2020 and the end of FY26 has seen cumulative accretion of nearly ₹57 trillion in domestic household equity portfolios. Specifically, the quarter ending December 31, 2025, witnessed an increase of ₹3.4 trillion in these investments. These figures encompass both direct share ownership and investments channeled through the diverse landscape of mutual funds.
Savings Shift Dynamics
The dramatic upswing in household equity investments observed since the onset of the Covid-19 pandemic is a clear indicator of a fundamental transformation in how Indians approach their savings. For a considerable portion of the post-pandemic era, interest rates offered by traditional savings avenues, such as fixed deposits, remained relatively subdued. This environment spurred households to actively seek out avenues that offered the potential for higher real returns, leading many to pivot towards equities. Concurrently, there's a discernible and growing inclination among households to gain exposure to the equity market indirectly, primarily through mutual funds, even as direct investments in stocks have experienced intermittent periods of volatility.
Mutual Funds Lead
While the overall share of Domestic Institutional Investors (DIIs) in the market edged upwards to 19 percent, individual investors saw their proportion decline slightly. In the December quarter, individual investors' share dipped by 25 basis points sequentially, reaching a three-year low of 9.3 percent. These calculations are derived from quarterly shifts in the valuation of individual holdings in companies listed on the National Stock Exchange (NSE), adjusted for net new investments. The Market Pulse report also highlighted a record high in quarterly net selling by individuals in the NSE's secondary markets, totaling ₹24,964 crore. Their stake in the Nifty50 index also saw a reduction of 10 basis points, settling at 7.7 percent, a six-year low. Conversely, Direct Mutual Funds (DMFs) continued their ascent, achieving new record highs in ownership. Across NSE-listed companies, DMF ownership reached 11.1 percent, and within the Nifty50, it stood at 13.6 percent. During the third quarter of FY26, DMFs saw investments amounting to ₹1.03 trillion.
Market Resilience Factors
The sustained robustness observed in retail participation and the ongoing deepening of household involvement with capital markets signify a positive development for the Indian equity landscape. This trend suggests a gradual decrease in the sensitivity of Indian stocks to global economic fluctuations and sporadic outflows from Foreign Portfolio Investors (FPIs). The continuous momentum in mutual fund investments, in particular, indicates a growing trust and comfort level among retail investors with this investment vehicle. This structural shift, characterized by increased and sustained retail engagement, contributes to greater stability and reduces the market's susceptibility to external shocks, fostering a more resilient and domestically driven equity market.
