Capital markets: SEBI flags ₹691,000 cr FY25 shift

What SEBI said and why it matters

India’s capital markets are becoming a central avenue for household savings and wealth creation, SEBI Chairperson Tuhin Kanta Pandey said on Monday, pointing to a structural change in how Indians invest. Speaking at the ICICI Securities India Investor Conference 2026, Pandey said households are increasingly allocating savings toward market-linked investment avenues. He framed the shift as more than a market trend, arguing that capital markets are actively enabling growth by connecting household savings with enterprises, attracting global capital, and converting economic momentum into investable opportunities.

The comments come alongside new SEBI research and consultation papers that attempt to measure household participation more accurately and widen access to market products. Together, the speeches and data releases strengthen the case that retail participation is deeper than older datasets suggested, even as physical assets such as gold and real estate continue to hold a large share of household wealth.

Household financial savings rising as a share of GDP

Pandey said household financial savings as a share of GDP increased to 21.7% in FY25, up from around 20% in FY23. He attributed this rise to broader participation across financial instruments, and said the direction of travel indicates a clear shift toward market-linked avenues.

The SEBI chief’s remarks align with the view that households are diversifying beyond traditional savings formats. The emphasis was not just on equities, but also on a widening set of channels through which households access markets, including mutual funds and other securities-market products.

SEBI’s salary-deduction mutual fund proposal

A SEBI consultation paper published last week proposed a mechanism to strengthen the “wall of your money” by enabling employers to deduct money from salary every month into mutual fund schemes chosen by employees. The proposal is positioned as a way to make regular investing easier and more systematic, building on the behaviour already visible in rising SIP participation.

While the consultation’s details were not expanded in the provided material, its core premise is clear: reduce friction for households who want to invest regularly, and broaden participation through a payroll-linked channel.

Working paper revises FY25 household market savings higher

In another SEBI working paper published last week, household contribution toward financial assets was revised upward to ₹691,000 crore for FY25, compared with an earlier estimate of ₹543,000 crore. The study, authored by officials from SEBI’s Department of Economic Policy and Analysis (DEPA), said household savings flowing through securities markets had been significantly undercounted for years.

The revised framework is described as more data-driven, replacing estimates with granular actual market data. The study also said it captures channels largely outside the national savings framework, including secondary market transactions, SIP-driven mutual fund investments, ETFs, REITs and InvITs, private debt placements, and preferential allotments.

Household wealth in securities markets: what the study found

SEBI’s working paper estimated the total stock of household financial assets held through Indian securities markets, a figure it said had not been comprehensively captured earlier. According to the study, household assets in securities markets stood at ₹14,134,000 crore by FY25.

Equities formed the largest component at ₹8,900,000 crore, while mutual fund holdings were ₹4,440,000 crore. Separately, another figure cited from the working paper placed household wealth in the securities markets at ₹14,100,000 crore as of March 2025, with equity holdings close to ₹9,000,000 crore.

Market expansion: market capitalisation, issuances, and investors

Pandey also highlighted the scale of India’s securities market expansion. India’s market capitalisation rose nearly fivefold from ₹9,500,000 crore in FY16 to about ₹46,300,000 crore by April 2026.

He said the primary market remained an important channel for capital formation, facilitating around ₹970,000 crore of capital raising annually. In a separate speech-linked data point, capital markets (equity and debt together) facilitated average issuances of roughly ₹950,000 crore each year over the past ten years.

Pandey added that the number of unique investors in the securities market has grown at roughly a 21% CAGR, and there are approximately 135 million distinct market participants. He also said India’s market-cap-to-GDP ratio moved from around 69% in FY16 to more than 130% today.

Economic Survey: equity and mutual funds gaining share in savings

The Economic Survey cited a longer-term change in household balance sheets. It said the share of equity and mutual funds in annual household financial savings increased from 2% in FY12 to over 15.2% in FY25.

It also reported that average monthly SIP flows rose seven times, from under ₹4,000 crore in FY17 to over ₹28,000 crore in FY26 (April to November). The Survey added that SEBI undertook initiatives to reinforce regulatory integrity, streamline market operations, and enhance investor protection through improved verification, disclosure, accessibility, and risk surveillance.

How much households hold elsewhere: RBI Bulletin snapshot

Even with rising market exposure, the data cited indicates household wealth remains heavily tilted toward traditional stores of value. RBI Bulletin data cited in the provided material put total household financial assets at about ₹35,300,000 crore. Of this, roughly ₹15,300,000 crore is in bank deposits, and approximately ₹410,000 crore is invested in mutual funds (as per that cited dataset).

The contrast between datasets underlines a key point from the SEBI-linked study: measuring securities-market-linked household wealth comprehensively can materially change how the scale of retail participation is understood.

Key numbers at a glance

Market impact and why the methodology change matters

The SEBI chair’s comments, together with the revised working-paper estimates, strengthen the narrative that household participation is broadening through more channels than older approaches captured. By including secondary market transactions and vehicles such as ETFs, REITs, and InvITs, the revised approach attempts to measure how households actually access markets rather than inferring flows indirectly.

The scale of household securities-market wealth cited, about ₹14,100,000 crore to ₹14,134,000 crore, helps explain why domestic flows can provide a stabilising counterweight during volatile periods. Pandey also argued that efficient capital markets play a stabilising role by enabling transparent price discovery, absorbing shocks without destabilising the broader financial system, and sustaining investor confidence.

Conclusion

SEBI’s latest speeches and research point to a sustained shift in household savings toward market-linked instruments, backed by revised estimates that place FY25 capital market savings at ₹691,000 crore and household securities-market wealth at around ₹14,134,000 crore. With SEBI also exploring salary-deduction mutual fund contributions, the next set of developments will likely come through consultation outcomes and further reporting on household savings measurement using granular market data.