Wealth Creation in India: A New Investor Landscape
Emerging Investors: A Broader Participation
According to the recent report titled ‘Wealth Inclusion in India: Expanding Investor Participation Beyond Metro India’ by EY India, the future of wealth creation in India is set to include a diverse array of investors. This includes salaried families in Tier-2 and Tier-3 cities, women, young professionals, and the Gen Z demographic. The findings indicate that over 100 million potential new investors may enter the long-term investment ecosystem by 2035, primarily influenced by an increase in participation from smaller cities and digitally-savvy households.
Investment Growth Beyond Major Metros
The report highlights a notable trend where investment activities are expanding beyond the country’s largest metropolitan areas. Currently, cities beyond the top 110 contribute 12% of the mutual fund assets under management. Additionally, it is noteworthy that districts outside the top 10 host around 70% of individual investors who engaged in trading on the National Stock Exchange (NSE) during FY25.
Shifts in Demographics of Investors
Younger investors are significantly influencing the investment landscape; as of June 2026, those under 30 made up 38% of total investors, an increase from 23% in FY19. Furthermore, the participation of women in investment, particularly from smaller cities, has also grown. In Business-30 (B30) cities, female investors accounted for 25% of investors in FY24, up from 20% in FY19.
Facilitating Investment with SIPs
Systematic Investment Plans (SIPs) are playing a crucial role in democratizing access to mutual funds. As of the latest data, SIPs comprise 35% of individual mutual fund assets under management, up from 19% in FY19. Additionally, micro-SIPs, allowing entry with just US$2.6, and partnerships for distribution reaching over 250,000 rural locations are crucial for integrating first-time and underserved investors into formal investment channels.
Digital Transformation and Future Prospects
Pratik Shah, National Financial Services Leader at EY India, emphasizes the importance of digital public infrastructure in advancing financial inclusion. He stated, “India’s first financial revolution was about connecting citizens to the financial system. The next one will be about connecting households to wealth creation.” As digital payment systems thrive, with over 550 million active UPI users, the potential for broader investment participation is evident; however, only about 62 million individuals invest in mutual funds and around 50 million are engaged in equity markets.
The Transition Towards Financial Assets
India’s household asset composition is witnessing a gradual shift towards financial investments. By FY25, investable assets approached US$5.2 trillion, with individual investors representing 18.7% of the Indian equity market through direct equity and mutual fund holdings. This marks the highest level of retail participation in over two decades, illustrating both progress and the significant potential for further growth in formal financial market participation.
Building a Wealth Creation Framework
Vishal Madia, Partner in Wealth and Asset Management at EY India, suggests that while digital infrastructure has been successfully established, constructing an ecosystem that nurtures wealth creation is the next priority. He explained, “By combining DPI, consented data sharing, AI-driven intelligence and scalable advice, India can create a Wealth Stack that democratizes investing and strengthens financial capability.”