Investor awareness vis a vis securities market landscape

Recently, Securities Exchange Board of India (SEBI) has released an extensive investor awareness survey to assess the risk tolerance, awareness and penetration to design investor education program, to understand barriers among non-investors and triggers among investors.

The “Investor Survey 2025” was conducted by Kantar with AMFI (Association of Mutual Funds of India), NSE (National Stock Exchange), BSE (Bombay Stock Exchange), NSDL (National Securities Depository Ltd) and CDSL (Central Depository Services Ltd).

The results show that about 9.5 per cent of Indian households (HH) (approx. 32 mn HH) invest in securities market. As many as 63 per cent of HH are aware of at least one market product i.e., MFs, ETFs, stocks, REITs, AIFs, etc. but awareness rarely converts into participation.

While awareness is highest in metros at 89 per cent and lowest amongst rural and agriculture-linked families i.e., less than 50 per cent. The top products by awareness are Mutual Funds (MF) / Exchange Traded Funds (ETF) at 53 per cent, followed by stocks / shares at 49 per cent, F&O 13 per cent, REIT/InvIT at 10 per cent, same for corporate bonds and Alternate Investment Fund (AIF) at 6 per cent. While the top products by penetration are ETF/MF at 6.7 per cent, stocks at 5.3 per cent and less than 1 per cent for others.

Only 36 per cent of the current investors show high-to-moderate market knowledge. Even the most affluent or educated segments, about half of the investors still display low understanding. Among non-investors, knowledge levels are half those of the investors, though intent is rising esp in salaried urban and Gen Z groups.

As many as 22 per cent of the aware non-investors say they intend to invest in next year, a large latent potential. The starkest finding from the survey is that 80 per cent of the HH have low risk tolerance, capital protection outweighs return expectations. Only 5.6 per cent of the willing to take high risk for higher returns. India, thus, remains a deeply risk-averse market.

The survey finds that 74 per cent of the respondents find complexity and information gap as key barriers to invest. They don’t know where or how to start and complain about information overload. As many as 73 per cent fear losing money, uncertainty of performance as barriers highlighting the risk & return fears.

As many as 51 per cent highlight trust & transparency as issues as they display low faith in intermediaries or market safety. Another important emphasised by both the investors and intermediaries is the accessibility & process hurdles like too many options and cumbersome account opening process.

The survey also found that 73 per cent felt that ease of investing (simplified KYC, digital access) would encourage higher participation. As many as 62 per cent felt that better understanding and publishing success stories would enhance for higher education and enhanced information decimation.

As many as 61 per cent believe that lower charges and minimums would allow for cost efficiency. As many as 58 per cent felt that trust and guidance could be achieved by credible advisors and peer recommendations. More importantly, intermediaries stressed the need for trusted advice, simple onboarding and educational resources as prime enablers.

Narrating the reasons for lapses (discontinued investments), As many as 84 per cent of the ex-investors cited losses or poor performance. As many as 74 per cent cited change in goals or urgent cash needs while 30 per cent mentioned due to higher fees and 28 per cent due to negative sentiment/fear of market fall. While 72 per cent cite high growth potential of higher returns, long-term wealth creation as the triggers for investing, as many as 58 per cent mentioned income generation or extra income or tax benefits with little over half of the respondents do it for diversification & inflation protection needs.

Another important finding from the survey is that 62 per cent of the investors act on finfluencer advice and over 90 per cent of them find credible.

Less than 1 per cent of the respondents have attended an IEP (Investor Education Program) and even among investors only about 5.5 per cent urban population have done it. Social media (70 per cent), mobile apps (60 per cent) and TV/digital ads (51 per cent) are the most-preferred channels with videos (80 per cent), social posts (69 per cent) and online courses (50 per cent) as the preferred formats.

An equal percentage (47 per cent) prefer Hindi and regional languages only 5 per cent stick to English as the language. The most sought-after topics include fraud & scam prevention (59 per cent), risk management & diversification (53 per cent), investor rights (51 per cent) along with investment options & retirement planning.

Awareness on grievance redressal is almost negligible. Awareness of SCORES (SEBI Complaints Redressal System) is low at just 6 per cent and filing rate among those aware is only 4 per cent, yet the satisfaction is around 90 per cent. Police (43 per cent) remains the first contact point for grievance cases, signaling an outreach gap by the regulator.

Risk & uncertainty i.e., fear of loss (36 per cent) and unpredictable returns (30 per cent) form the major challenges post-investment. Inconvenience and complexity or lack of user-friendly platforms (24-30 per cent) and knowledge gaps (70 per cent) where they find it difficult to interpret statements and tracking updates as other bigger challenges.

Overall, Indian security market penetration has grown but remains under 10 per cent HH, showing immense untapped potential. Risk aversion and knowledge gaps are the twin constraints for further growth. Digital, multilingual investor education is crucial to bridge the awareness-to-action.

Simplified onboarding, low-cost access and credible intermediaries can accelerate inclusion. Finfluencers are shaping retail behavior, necessitating an oversight and responsible collaboration. SEBI and AMFI are likely to expand targeted education and digital literacy campaigns based on these findings.

(The author is a partner with “Wealocity Analytics”, a SEBI registered Research Analyst firm and could be reached at [email protected])