Page 34 - Banking Finance September 2024

ARTICLE

Reigning in

Finfluencers amidst

Increased Retail

Market Participation Jyotirmoy Mukherjee

Payments Card Industry
Professional & Doctoral
Research Scholar, IIM Indore

The absolute number of investors in India is higher compared to mature markets like U.S, China and
others, while the per capita figures are still lower indicating enough headroom for growth. Younger
generation in age group of 21 to 35 years are leading this wave of new investors. This massive growth
in retail participation is multidimensional consisting of Economic, Structural and Behavioural drivers.

T he assets under management (AUM) of Indian 8% and future projected growth rate around 7% makes
Mutual Fund industry has witnessed a six-fold
it a significant destination for businesses and investments
increase in the past 10 years (64.9tn in July
2024 compared to Rs 10tn in July2014). As per Large Market and Consumption: India is a
Economic Survey 2023-24 there are 9.5 crores individual consumption driven economy with private consumption
contributing 60% to India's GDP. India's household
investors having Rs 64tn invested directly or indirectly
consumption has been a significant economic propeller,
in the financial markets. (Rs 36 tn in direct equities and
Rs 28tn through mutual funds). Consider the case of doubling in value to reach 2.1 tn $ between 2013 and
Mutual fund accounts, 91% is accounted for by retail 2023.
investors. The absolute number of investors in India is
Per Capital income: The per capita Net National
higher compared to mature markets like U.S, China and
Income of Rs 1.06 lakhs has shown a year-on-year growth
others, while the per capita figures are still lower
of 7% this is higher than most advanced countries and
indicating enough headroom for growth. Younger
continues to show promise.
generation in age group of 21 to 35 years are leading
this wave of new investors. This massive growth in retail
Structural Drivers
participation is multidimensional consisting of Economic,
Low returns from traditional products like Bank
Structural and Behavioural drivers. Let us dwell into each
accounts and FDs: With Inflation hovering above 4%
of these categories of drivers.
and food inflation around 8% to 9%, interest rate of 3%
to 8% on bank accounts and FDs becomes a dampener.
Economic Drivers
Stable and high growth economy: India's political Increased returns from Equity: Average returns from
stability, size of economy coupled with GDP growth of Mutual funds in last 10 years has been around 10% to

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