Indian households witnessed a sharp erosion of wealth in equities during the March quarter, with nearly Rs 12.6 lakh crore wiped out amid a broad market correction triggered by geopolitical tensions, rising crude oil prices, and sustained foreign investor selling, according to the latest NSE Market Pulse report.
The correction coincided with a more than 10% fall in the benchmark Nifty during quarter ended March, as markets reacted to escalating conflict concerns in West Asia, including tensions linked to Iran, alongside a surge in global crude prices. Additional pressure came from heavy foreign portfolio investor (FPI) outflows and a broader shift in global capital toward artificial intelligence-linked markets such as Taiwan and South Korea.
Despite the sharp quarterly loss, the report noted that cumulative household equity wealth creation since April 2020 remains significant at around Rs 44 lakh crore. However, fiscal 2026 saw a net dip of Rs 2.5 lakh crore, largely driven by the fourth quarter correction. Total household equity holdings stood at Rs 76.5 lakh crore, reflecting a compound annual growth rate of 29.6% since March 2020.
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Individuals, through direct holdings and mutual funds, accounted for 18.7% of total NSE-listed market capitalisation as of March 2026. This marked a marginal quarterly increase and remained close to record highs. The report also highlighted that combined individual holdings have now exceeded FPI ownership for six consecutive quarters, reversing a long-standing structural gap that earlier favoured foreign investors.
At the same time, direct equity participation by individual investors fell to a five-year low of 9.1%, continuing a two-quarter decline. This moderation reflected volatile market conditions and a shift toward net selling in secondary markets during fiscal year 2026, the first such instance in seven years. Ownership in key indices such as the Nifty 50 and Nifty 500 also declined to multi-year lows.
Foreign portfolio investors recorded net outflows of $19.6 billion in fiscal year 2026, with their ownership in NSE-listed companies falling to a 17-year low of 15.8%. In contrast, domestic mutual fund ownership rose to a record 11.4%, supported by sustained SIP inflows and consistent retail participation. Domestic institutional investor ownership overall remained above FPI levels for the sixth straight quarter.
The report also pointed to a broader structural shift in household participation, with indirect exposure via mutual funds proving more resilient than direct equity investing.
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