Retail Participation in Indian Stock Market Declines Amid Equity Corrections and Foreign Outflows
In FY26, individual participation in India's stock market declined for the first time in nearly a decade, with the number of retail investors in the NSE cash market falling from 3.75 crore to 3.59 crore. This drop followed sharp equity corrections, stricter futures and options regulations, foreign investor selling, and weak mid- and small-cap performance. Indian households lost about Rs 12.6 lakh crore in equity holdings during the volatile March quarter, driven by geopolitical tensions, rising crude prices, and sustained foreign portfolio outflows. Despite these challenges, long-term retail participation remains supported by rising SIP adoption and financialisation trends.