Household ownership of equity surged to 21.5% as India’s equity market capitalization grew by more than 50% year-on-year, reaching Rs 441 lakh crore in June 2024.
Household equity ownership has stayed between 21-22% since 2021, after being more stable between 18-20% for five years and between 16-17% from 2011 to mid-2016, according to Motilal Oswal Financial Services.
Combined direct and indirect household exposure (through mutual funds) to equities and investment funds (E&IFs) amounted to Rs 134 lakh crore (44% of GDP) in the first quarter of FY25.
In June 2024, household sector holdings in the equity market rose to 95 lakh crore from 60 lakh crore the previous year, fueled by a surge in overall market capitalization.
While the household sector’s share in equities has seen periodic increases, its growing financial assets have been driven by the broader market growth.
Compared to other major economies where households own 11-18% of listed equities, India’s 21-22% is higher. The US leads with a 40% share, and household equity ownership has grown in India, Germany, and the US since the pandemic.
Direct investments are only part of household exposure to equities, with mutual funds playing a major role in the total exposure.
The mutual fund industry’s assets under management (AUM) reached Rs 61.2 lakh crore in June 2024, a 38% increase from last year, with households owning 63% of this AUM.
Equity instruments made up 70% of the household share in mutual funds, with non-equity assets constituting 30%, similar to 2019 but lower than a decade ago.
Using RBI’s methodology for household financial data, Motilal Oswal achieved 96-97% accuracy and extended the estimates to Q1 of FY25.
The equity market has played a larger role in household financial assets, especially since the pandemic, with significant growth over the past 4-5 quarters.
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