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According to a research paper written by SEBI officials, the popularity of financial assets is continuously increasing among Indian families. Savings through securities market have increased from Rs 3.58 lakh crore in the last financial year to Rs 6.91 lakh crore in 2024-25. The paper said that this revised estimate is much higher than the figure of Rs 5.43 lakh crore recorded under the previous methodology for FY25. As a result, India's gross savings-to-GDP ratio for 2024-25 increases by 47 basis points to 34.94 percent compared to 34.47 percent under the previous methodology.
Found alternative to traditional investment
The paper, written by Prabhat Kumar Rath, Shiny Sunil and Kalyani H, says that household savings channeled through the securities market are an important part of financial savings and are emerging as an attractive alternative to traditional assets like gold and real estate. The authors said in their research paper uploaded on the Sebi website on Wednesday that while physical assets like gold and real estate have traditionally been preferred, financial assets are gaining popularity due to their higher return potential and liquidity (ease of converting into cash). He further said that government initiatives like tax breaks on investments, financial inclusion programs and digital banking have also encouraged Indian households to turn to financial assets.
This type of study
SEBI clarified that the conclusions and views expressed in this paper are solely those of the authors and do not necessarily reflect the official position of the regulator. This study examines the macroeconomic impact of changes in the methodology for calculating household savings through the Indian securities market. This change was made by SEBI in consultation with the Reserve Bank of India (RBI) and the Ministry of Statistics and Program Implementation (MoSPI). This revised methodology has been included in the national accounts series based on the new base year 2022-23.
Earlier the calculation was done like this
Earlier, RBI and MoSPI mainly relied on estimates to calculate domestic savings through securities market. Under the old methodology, 35 per cent of public and rights issues in equities, 40 per cent of public issues of corporate debt, and actual investments made in mutual funds were treated as household savings. However, this approach did not include preferential allotment, private placement of debt, secondary market transactions, and investments in new-age instruments such as REITs, InvITs and Alternative Investment Funds (AIFs).
The new methodology uses real and granular data from depositories, stock exchanges and the Association of Mutual Funds in India (AMFI) to capture a broader range of households' investments across instruments and market segments. In addition to individual investors, it also includes non-profit organizations serving families (NPISHs)—such as trusts, societies and charitable institutions.
Interesting figures found in research paper
According to the research paper, household savings through securities market are expected to increase from Rs 2.60 lakh crore in 2022-23 to Rs 3.58 lakh crore in 2023-24, and then reach Rs 6.91 lakh crore in 2024-25. A total investment of Rs 6.32 lakh crore was made in the primary market in 2024-25. The largest share in this was from mutual funds (Rs 5.13 lakh crore), followed by equity issues (Rs 95,139 crore).
A total of Rs 59,452 crore was invested in the secondary market this year; Net investments made in debt securities, exchange-traded funds, REITs and InvITs contributed significantly to this. It has been told in the paper that in 2024-25, the savings of households through securities market was 2.17 percent of GDP, whereas according to the previous methodology this figure was 1.71 percent. Similarly, the ratio of household savings to GDP increased from 21.23 percent to 21.7 percent; At the same time, the net financial savings of households increased from 6.63 percent to 7.10 percent of GDP.
Important points of research paper
Jimeet Modi, Founder and CEO of SAMCO Group, said that the most important finding of this report is that in the financial year 2025, families sold direct equity shares worth Rs 54,786 crore (ie they were net sellers). He said that last year also he had sold shares worth Rs 69,329 crore. This happened when during this period he made record breaking investments in mutual funds. “This is not a retreat. This is a maturity,” he added, adding that retail investors are now booking more and more of their profits in direct equities, while deploying their new savings into professionally managed instruments.
Modi said that mutual funds have now become the main source of financial savings for families. Out of the total Rs 6.91 lakh crore invested in the securities market in the financial year 2025, about four-fifths has come through mutual funds. The report also estimates that the total wealth of households in the Indian securities market — which includes equities, mutual funds, debt securities, REITs, InvITs and AIFs — stood at Rs 141.34 lakh crore at the end of FY 2024-25. Of this, the share of equity holdings was Rs 88.92 lakh crore, the share of mutual fund investments was Rs 44.39 lakh crore and the share of AIF investments was Rs 1.55 lakh crore.
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