Just one in 10 Indian households invests in securities market products such as stocks and mutual funds, according to an investor survey conducted by market regulator Securities and Exchange Board of India (SEBI).
The report highlights that while awareness of financial products is steadily increasing, risk aversion and a trust deficit continue to hold back broader participation. At the same time, the survey, conducted jointly with the Association of Mutual Funds in India (AMFI), National Stock Exchange (NSE), BSE, National Securities Depository (NSDL) and Central Depository Services (CDSL), reveals the growing influence of 'finfluencers', with a majority of retail investors admitting that social media voices now shape their investment decisions.
The nationwide survey, conducted after a 10-year gap, covered over 90,000 households across 400 cities and 1,000 villages. It found that while 63% of households are aware of at least one securities product, most remain on the sidelines, preferring safer savings instruments like deposits, gold, or insurance. Urban households show higher penetration at 15% compared to just 6% in rural areas, with metros such as Delhi and Mumbai leading adoption.
At the same time, the study highlights a dramatic shift in how investment decisions are being shaped. Finfluencers—social media-based financial influencers—have emerged as a powerful force in retail investing.
Nearly six in 10 investors reported turning to finfluencers, friends, or online communities for investment advice, with over 60% admitting they act on influencer recommendations. YouTube and Instagram were identified as the most popular platforms.
The findings underline the opportunities and the risks ahead for regulators. With 22% of non-investors expressing an intention to enter the market within the next year, SEBI sees strong potential for expanding participation. But it warns that unless financial education, grievance redressal and trust-building mechanisms are strengthened, many new investors could remain vulnerable to misinformation and market volatility.
A Risk-averse Nation
The findings confirm what many in the financial sector have long observed: India remains a deeply risk-averse society. An overwhelming 79.7% of households prioritise the safety of their money over higher returns. Only 14.7% fall into a medium-risk category, willing to accept some volatility for better returns, while a mere 5.6% display high risk tolerance.
This preference for capital preservation has a direct impact on investment choices. Traditional savings instruments such as fixed deposits, gold and insurance continue to dominate household portfolios, while securities market products like mutual funds, stocks and bonds remain niche.
Awareness High, Participation Low
SEBI’s survey reveals that 63% of households, about 213mn (million), are aware of at least one securities market product. Mutual funds and exchange-traded funds (ETFs) enjoy the highest awareness (53%), followed by stocks and shares (49%).
However, awareness does not translate into action. Only 9.5% of households—around 32mn—are actually invested in any securities product.
Urban households are significantly ahead, with 15% penetration compared to just 6% in rural areas. In fact, in some of India’s largest metros like Delhi (20.7%) and Mumbai, penetration is three times the national average. By contrast, states such as Nagaland (3.4%) and Bihar (7.9%) report some of the lowest levels of participation.
Barriers: Complexity, Risk & Trust
Why does high awareness fail to convert into investments? SEBI’s survey identifies three major obstacles:
1. Complexity and information gaps (74%)
Many respondents said they did not know how to start investing, found the information overwhelming, or were confused by the sheer range of products.
2. Risk concerns (73%)
Fear of losing money due to market volatility and uncertainty about returns remains a dominant worry.
3. Trust and transparency issues (51%)
A lack of confidence in financial institutions, fund managers and intermediaries discourages participation.
These barriers apply not just to non-investors but also to 'intenders'— individuals who are aware of securities products and considering entering the market. Even they reported confusion, risk aversion and limited trust as reasons for holding back.
Influence of Finfluencers
The survey points to the rising influence of financial influencers, or ‘finfluencers’, on investment decisions. Nearly 59% of investors said they rely on friends, family or finfluencers for advice. Of those following influencers on platforms like YouTube, Instagram and Telegram, 62% admitted making investment decisions based on their recommendations.
While this signals new avenues for market outreach, it also raises regulatory questions about misinformation and unverified advice.
Motivators for Non-investors
Interestingly, the survey also identifies what might bring non-investors into the fold. Easy access, simplified processes, and friendly digital platforms rank as the top motivators (73%). Lower fees and reduced minimum investment requirements (61%) also appeal to first-time investors.
Equally important is education: over 62% said they would be encouraged to invest if they understood how products worked. Success stories of investors and positive media coverage were cited as influential factors, showing the role narratives play in shaping confidence.
Investor Education: Digital First, Vernacular Strong
One of the survey’s most striking findings is the poor reach of investor education programmes. Less than 1% of respondents reported attending a SEBI or industry-run workshop or webinar.
Among those who did, 70% rated the experience as 'somewhat useful', while only 21% found it 'highly useful'.
What investors want, however, is clear: digital-first education. Social media (70%), mobile apps (60%), and TV/digital ads (51%) are the top channels for receiving financial education. Younger cohorts such as Gen Z prefer video-based explainers and online courses, while older investors lean towards articles, audiobooks and panel discussions.
Language plays a crucial role: 47% of respondents prefer education in Hindi, another 47% in regional languages, and just 5% in English. This highlights the need for vernacular content in financial literacy campaigns.
Grievance Redressal: Low Awareness, High Satisfaction
SEBI’s grievance redressal system—via the SCORES website and helpline—remains underutilised. Only 14% of respondents were aware of it, and among them, just 6% had filed complaints.
Instead, most investors continue to approach the police (43%) or brokers (32%) when they encounter issues.
However, for those who did use SEBI’s mechanism, the satisfaction rate was exceptionally high at nearly 90%. This suggests that greater awareness of regulatory redressal tools could significantly boost investor confidence.
Triggers & Lapses: Investor Journeys
Among current investors, the main triggers for participation include the promise of high growth (72%), additional income streams (58%) and portfolio diversification (51%). However, many also seek short-term gains, particularly in futures & options (F&O), raising concerns about speculative behaviour.
On the flip side, investors who lapsed out of the market cited poor performance (84%), significant financial losses, and high volatility as reasons. Some withdrew due to changing personal financial goals or urgent liquidity needs.
Despite the challenges, SEBI’s survey reveals a strong pipeline of potential investors. About 22% of non-investors who are aware of securities products expressed an intent to start investing within a year. Among 'lapsers,' six out of eight said they plan to return.
These findings indicate that with the right combination of education, simplified access, trust-building and regulatory outreach, India’s retail participation could see a significant expansion in the coming years.
What This Means for Policy
The survey provides SEBI and market intermediaries with clear direction:
1. Simplify processes and reduce entry barriers.
2. Expand investor education in Hindi and regional languages through digital platforms.
3. Increase awareness of SEBI’s grievance redressal systems.
4. Regulate and engage with finfluencers to ensure responsible financial communication.
5. Build trust through transparency and investor-friendly practices.
The SEBI Investor Survey 2025 paints a picture of India at the cusp of deeper financial participation. With 63% awareness but only 9.5% penetration, the untapped potential is vast. For millions of households, securities markets remain intimidating or opaque. Yet the willingness to learn and participate is evident.
By addressing risk aversion, simplifying systems and strengthening financial literacy in regional languages, regulators and intermediaries have a unique opportunity to transform the way Indians invest.
