Urban–rural gap persists, but nearly one-fifth of aware non-investors plan to enter markets in a year
Market participation remains sharply skewed towards urban India
India’s decade-long boom in capital markets has yet to translate into broad household participation, with only 9.5 per cent of households investing in securities market products, leaving over 30 crore households outside the formal market ecosystem, SEBI’s Investor Survey 2025 shows.
Of the 33.72 crore households in the country, 53.5 per cent are aware of securities market products but do not invest, while 37 per cent are not aware of such products at all. Among the aware non-investors, 22 per cent intend to invest within the next 12 months, pointing to a sizeable pipeline of potential new investors.
“The untapped majority, individuals who are yet to participate in securities market products, represents a vast opportunity to redefine financial inclusion and unlock new avenues for economic growth,” said the report released on Tuesday.
Urban skew
Market participation remains sharply skewed towards urban India. Urban household penetration stands at 15 per cent, more than double the 6 per cent seen in rural areas. Within cities, the top nine metros report the highest participation at 23 per cent, followed by towns with populations between 10 lakh and 40 lakh at 16 per cent and 5-10 lakh at 14 per cent.
However, intent to invest tells a different story. Nearly 50 per cent of all ‘intenders’ come from rural India, while the top nine metros account for only 12 per cent of the total intender base. States such as Uttar Pradesh lead in investor intent at 11 per cent, Maharashtra at 10 per cent and Tamil Nadu at 9.
Mutual funds and ETFs are the most popular entry products, seen as a balanced risk-return option. Meanwhile futures and options remain marginal, with penetration below 1 per cent.
Investor awareness
While 63 per cent of households are aware of securities market products, only 8.5 per cent hold a demat account, which shows a large awareness-participation gap. Even among investors, engagement is uneven: 60 per cent are active investors, while 40 per cent are dormant, having made no fresh investments in the past year.
Complexity and lack of confidence remain key barriers. One of the survey respondents said, “Because I have not learned about them fully, I am still in the learning stage. Once I learn fully, I will start investing.”
Participation rises sharply with income, education and occupation. NCCS (National Consumer Classification Systems) A households show 24 per cent penetration, compared with 5 per cent for NCCS B and just 2 per cent for NCCS C/D/E. Post-graduates record 27 per cent participation, while salaried professionals stand at 23 per cent.
Men show 11 per cent participation versus 7 per cent for women, with women also displaying lower risk tolerance.
Published on January 20, 2026
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