Rise Of Women In Individual Investor Registrations Is A Morale-Booster
Rise Of Women In Individual Investor Registrations Is A Morale-Booster
Indian capital market regulator- SEBI is spurring democratization of capital markets, and in the process ushering in innovations through a confluence of regulatory emblems, technological guardrails, investor centricity and increased awareness. It should be noted that since 2021, on an average nearly 30 million new demat accounts are being added every year, indicating the increasing preference to use capital market as a channel of financialization of savings.
Going by a recent research report by the Economic Research Department of State Bank of India (SBI), the dominance of Mumbai and the western region as the centre of supply of funds is gradually on the decline. When it comes to indirect retail participation in financial markets, the markets witness flow fund from Bangalore, Hyderabad and Kanpur with direct mutual fund participation overtaking indirect in key regions in terms of gross flows. But what are possibly more important are the facts that India savings rate is at 30.2 per cent, which is higher than the global average of 28.2 per cent.
Then, declining mean/median age and increasing share of less than 30-year age individuals reflects the influx of relatively young investors in the markets over the last few years. Apparently, this is being driven by technological advancements, lower trading costs and increased access to information. That’s not all. The most important and the crucial factor is that women participation in individual investor registrations has shown a gradual increase since FY22. This is quite a significant boost.
On breaking it down on a state-wise absis, among large states, Delhi (29.8 per cent), Maharashtra (27.7 per cent) and Tamil Nadu (27.5 per cent) exhibit higher female representation than the pan India average of 23.9 per cent in FY25 YTD, while states such as Bihar (15.4 per cent), Uttar Pradesh (18.2 per cent) and Odisha (19.4 per cent) had sub-20 per cent female share in their respective registered investor bases. These regional variations, notwithstanding, the overall progress highlights a steady improvement in gender inclusion within financial markets across the country.
Also, apart from a few states, the participation of women increased more than the national average compared to the FY22 figures. Looking towards the mutual funds segment, the increasing share of mutual funds in financial savings make them the most preferred instrument for financialisation of savings. The new SIP registered increased fourfold since FY18 to 4.8 crore leading to total SIP contribution of around Rs. two lakh crore, according to the SBI research report. While capital market is a better avenue to financialisation of savings, the prevalence of F&O trading is a cause of worry.
As per SEBI, 91.1 per cent of Individual F&O traders (in absolute numbers, nearly 73 lakh traders) incurred losses in F&O in FY24. These loss-makers incurred an average loss of Rs. 1.20 lakh per person (lower than Rs. 1.43 lakh per person in FY23). As a result, both the Union Government and the regulator have taken various initiatives to protect savings of individuals, including tax on F&O and increase in lot size, among others.