It is a matter of serious concern that even after 37 years of setting up the regulator of the stock exchanges – Securities and Exchange Board of India (SEBI) – and the Modi government trumpeting that India is now the third largest global economy, and the Indian stock market the fourth largest worldwide, the actual number of shareholders in India is extremely poor, if the SEBI investors’ survey report 2025 is any guide. According to the report released last week, 63 per cent of Indian households are aware of securities markets but only 9.5 per cent actually participate, with low risk tolerance and high mistrust of financial institutions acting as key barriers. Unlike in developed countries, the key trends include a significant reliance on financial influencers and social media for investment advice.

Highlighting high awareness but low penetration, the SEBI report notes that though a significant 63 per cent of Indian households are aware of at least one security market product, actual participation remains extremely low at below 10 per cent. In other words, only 32 million families in this country have actually invested in the stock market. This clearly indicates that while the government boasts about the Indian economy growing at a fast rate, the equity cult has not spread in the country.

How weak the equity cult is in India can be understood by comparing the number of equity shareholders in developed countries. Among Americans, 55 per cent are shareholders, in China it is 42.13 per cent, in Hong Kong 45 per cent, in the UK 22 per cent, in Germany 17.2 per cent, and in Japan 16 per cent. In actual numbers, India has around 15 crore shareholders in a total population of 140 crore.

The SEBI report also reveals that awareness about investment in shares is a high 15 per cent in urban areas but a modest 6 per cent in rural areas.

Among the participating investors in SEBI’s research, only 36 per cent demonstrated moderate to high levels of knowledge about securities markets, while the remaining 64 per cent had limited or negligible understanding of products and associated risks. This indicates that a large portion of investors operate with minimum awareness, underscoring the important of financial education initiatives.

If the country is to be developed on an economically sound footing, the spread of the equity cult across India is a must. During the last 37 years of its existence, SEBI has not done anything worthwhile to spread financial literacy in the country or to spread confidencebuilding measures among people about financial institutions associated with the stock market.

For non-investors, the SEBI survey identifies key reasons for staying away from markets. About 74 per cent cite product complicity and lack of knowledge as major hurdles. Around 73 per cent mention concerns related to risk and return, particularly the fear of losses, while 51 per cent point to trust and transparency issues, including doubts about financial institutions and regulatory systems. In many cases, SEBI itself permits companies to float new issues at unheard-of exorbitant high premiums. The burnng question is: Why does SEBI not use scientific methods to fix the price/premia of new issues?