Zerodha's Nithin Kamath Considers This As 'Go-To Avenue' For New Investors

Amid the debut of India's new GDP series, Zerodha Co-founder Nithin Kamath noted that one of the biggest changes that the South Asian nation's markets have witnessed is the infusion of 11 crore investors post pandemic.

"The Indian markets have changed dramatically in the post-pandemic period. The first big change is, of course, the significant increase in new investors. There are over 11 crore unique investors now," he penned.

Further, he noted that another mega development includes the increase in first-time investors.

"Mutual funds have become the go-to avenue for new investors entering the markets, as you can see in the chart. Surprisingly, direct equity participation hasn't changed much relative to mutual funds. It's early days, but there are noticeable shifts away from FDs, real estate, etc," he said.

Driving the dialogue to the pertinence of investments during periods of instability, he noted, "Considering the unstable and closed-off world we are heading into and the massive investments needed in the future, this "deepening" of the markets is a good thing."

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Investor Confidence In Indian Capital Markets

If the stock markets could be dubbed as a “backwater” would’ve been generous back in 2017 would have been generous, according to Kamath.

In 2017, "there were barely 50 lakh active traders. Maybe 2-3 crore unique investors total," he said. However, the picture of stock markets painted today has completely transitioned.                                        

"In five or six years, India went from a couple of crore unique investors to around 11 crores. “Stocks” stopped being niche and entered everyday conversation, memes, and coffee-shop chatter. I lived through this from inside the industry, and it was wild," he said.

Further, he noted, "Between FY19 and FY25, there’s been a visible shift. Deposits as a share of financial savings have declined. Meanwhile, shares and mutual funds have grown from barely 2% of savings in FY12 to over 15% by FY25."