The Indian stock market which has seen significant growth in recent months has triggered the optimism in the retail investors. The bull run has also fuelled the initial public offering (IPO) market, demat accounts and SIPs among others. Albeit, the capital market has enough room left for certain development as the market evolves.
“The US has a Warren buffet and India has Nifty for wealth creation. Almost nine crore depositaries with unique PAN numbers are registered with NSE which accounts for 20 per cent of India’s households. If India must reach a market cap of USD 50 trillion in the next 20 years, it will come on the back of tech-driven startups that will lead wealth creation,” said Ashish Chauhan, Managing Director (MD) and Chief Executive Officer (CEO), National Stock Exchange (NSE).
The Indian stock market displayed its robust strength on the global front when the Bombay Stock Exchange (BSE) listed firms surpassed the USD 4 trillion market cap to become the fifth largest market. Moreover, optimism floats the Indian stock market would also surpass the Hong Kong stock exchange to excel to sixth position globally.
“Indian retail investors have been indulged in instant money-making tools. Ponzi schemes, cryptocurrencies and speculative trading in derivatives instruments have been a threat to investors' wealth. Besides, retail investors still relied upon conventional saving methods like fixed deposit, currencies and saving accounts which eventually eroded their wealth as they underperformed the Nifty’s 14 per cent CAGR," said Nilesh Shah, Group President and MD, Kotak Mahindra AMC.
Only 4.7 per cent of the Indian retail invest in mutual funds, while 1.3 per cent have direct exposure to equities. It is essential to educate the investors and spread awareness about wealth management to wealth creation,” added Shah.
The 13th international convention of the Association of National Exchanges Members of India (ANMI) brought together over 900 trading members from NSE, BSE, MCX, and other Exchanges. Dignitaries from the Indian capital market ecosystem, including regulatory authorities, MDs and CEOs of various exchanges also discoursed upon the trends which can be incorporated into the Indian stock market.
“Use of Artificial intelligence (AI) will be integrated into the trading and investing methods for better research and scanning the required nuances from the ocean of data. The AI will also enable an efficient approach to risk mitigation while trading in the volatile market. Additionally, the integration of conventional banks with payment banks will act as a catalyst to stimulate investing,” said Sameer Patil, Chief Business Officer, BSE.
BSE's Patil also emphasised the role of new-age brokers that have contributed to the manifold growth in onboarding new investors. The age group between 18 to 25 years only account for 12 per cent of total investors, which indicates the opportunities to tap into the new-age investors.
The penetration of demat accounts has increased manifold in 2023. Currently, India has more than 14 crore demat accounts. The introduction of the T+1 settlement by the Securities and Exchange Board of India (Sebi) has been a further step to bolster equity transactions. Sebi also shared the proposals for T+1 and subsequently instant delivery mechanisms. Likewise, the Indian equity market can also mirror the global market's ‘long trading hours’ to boost retail participation.
Rishi Nathany, Chief Business Officer, MCX said, “India will follow the long trading hours regime as it will be feasible for investors. Global actions pose a significant impact on the domestic market, the ‘gap up’ and ‘gap down’ opening result in losses to most of the investors. Long trading hours, particularly for the equity and derivatives traders who ride the volatility wave, will reduce the risk from overnight global and domestic actions."
Nathany asserted that additionally, it will increase retail participation from different walks of the profession who are not able to trade and invest due to overlap in their professional timings with market hours.
