India's young population is often tagged as being less afraid of consequences when it comes to major life decisions. But that doesn't seem to hold true for the equity markets.
A survey conducted by the Securities and Exchange Board of India and market research firm Kantar noted that nearly 79% of Gen-Z households which invest displayed risk-averse behaviour. Nearly 80% of all Indian households which invest were looking to ensure capital conservation, rather than take on more equity risk.
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As such only 9.5% Indian households or 3.2 crore families have invested or are currently invested in equity products. Of this, only 60% are active investors, with the rest being dormant. India currently has 33.7 crore families. Of the 90.5% remaining households in India, 53.5% are those aware of financial products but remain non-investors. Over 37% households are unaware of equity market products and are thus non-investors.
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Only 22% of the non-investors aware of equity products intend to actually invest in the future, with the rest being immediate non-prospects.
The penetration of equity products was the highest in top nine metro cities at 23%. Penetration in overall urban centres is at 15%. In comparison, rural areas saw only 6% of its population being invested.
The equity market penetration was highest in the national capital at nearly 21%. Interestingly, Andaman & Nicobar islands with their 17.1% penetration had the second highest ratio of equity investors. Compare that with Maharashtra's 17% and Puduchery's 16.4%.
The lowest penetration of equity products was in Nagaland at 3.4%. This was followed by Meghalaya at 4.2% and Uttarakhand at 4.5%, followed by Uttar Pradesh and Tripura at 5.3% each.
About 6.7% of India's total population invests in mutual funds and exchange traded funds. Direct stock market investments were at 5.3%.
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