The surge in retail participation in India’s capital markets has been driven by higher awareness of mutual funds, digitization enabling seamless investing and stable long-term returns, speakers at the Mint India Investment Summit 2026 said.
Shravan Sreenivasula, ED & Head, Investment Solutions, Avendus Wealth Management, noted that while access and awareness have helped, returns remain the main driver.
“Even in the last two years, the markets have been muted, but even now we’re looking at about 13% of them for 3, 5, 10 years, so it’s interested a lot of people to enter the markets,” he said, adding that IPOs were also a driver of retail participation and platforms like Mint ending information arbitrage.
From 2024, 3-, 5- and 10-year yields were around 15-16%, he said.
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Frictionless displacement
Sushant Bhansali, CEO of Ambit Asset Management, said that over the past five years, the risk appears to have reduced substantially. Drawdown was limited to 15-17% compared to 30-40% in previous cycles.
He believes this has given investors comfort, but he said “frictionless investing” has really changed the game.
However, he emphasized that it is not just about access, but about wealth creation. Bhansali said it’s really long-term investors who like to buy companies after doing some research, and these do-it-yourself investors are driving this growth, backed by strong market performance over the past decade, when the Nifty hasn’t seen a single negative year.
“So it’s not just about the approach, it’s about the impact it creates in everyone’s mind in creating wealth.”
Sreenivasula added that investors are allocating money into different buckets and in a bull market, “you’ll see trading become a national pastime.”
But many investors focus on long-term wealth creation. The equity assets under management of the mutual fund industry now stand at approx ₹36 lakh crore, which corresponds to a growth of 60% or more in the last three to five years. He also noted that 56% of investors now hold investments for more than two years, compared to 40% a decade ago.
HNI shift
Apart from retail, high net worth investors (HNIs) are also changing allocation patterns.
Sreenivasula said that since 2015-16, there has been a growing interest in VC/PE funds, with commitments now reaching approx. ₹3 million million crowns.
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Stripped of the benefit of indexation, bond fund index returns often fail to beat inflation, pushing investors toward credit funds and higher equity allocations.
“So there is a significant shift in risk taking that we have seen among investors, especially HNI and Ultra HNI investors, and the number of opportunities that cater to these investor needs has also increased,” he said.
Bhansali noted that the biggest shift has been from real assets to financial assets. The rapid wealth creation over the past 5-10 years has encouraged investors to take more risk.
“New Age founders are a different breed that I don’t have much to lose. It’s like double or quit.”
This new money, he says, is more impatient than traditional capital. While older investors were willing to play three- and five-year cycles, new investors are beginning to question performance over a one- or two-year period. “If you don’t deliver for three years, the money is gone,” he said.
Regulation lens
On regulation, Sreenivasula said the framework is moving in the right direction but needs further improvements.
He questioned the reasons that led accredited investors to invest in the stock ₹25 crore in an Alternative Investment Fund (AIF). If the HNI holds an Accredited Investor (AI) certificate with a net worth above ₹700 crore, he would prefer to invest in AIF with minimum commitment ₹1 crore, yet it exists ₹25 lakhs is being provided, he said, adding that inter-regulatory understanding needs to be improved.
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He also pointed out that the RBI’s limits on mutual fund investments in foreign stocks are hurting retail investors while HNIs are looking for alternative avenues like GIFT City.
“But in the last 10 years, I think the kind of territory that regulators have covered is phenomenal,” he said.
As markets mature, participants said the next phase of growth will depend not only on ease of access, but also on maintaining returns and balancing a growing appetite for risk with clear regulation.
