Volatility in Indian equities has triggered a sharp decline in direct equity investments by retail investors. So far in 2025, net inflows from this segment have dropped to just ₹13,273 crore, compared to ₹1.1 lakh crore during January–September 2024 — a nearly 90% fall.
March 2025 alone saw net outflows of ₹14,325 crore, the largest monthly withdrawal since 2016. Retail investors have been net sellers in five of the past nine months, despite brief phases of buying in July and August.
In contrast, mutual funds, insurance companies, and pension funds have consistently provided strong inflows, supported by SIP contributions, insurance premiums, and retirement savings. Analysts note that as direct investing has become more challenging, small investors are shifting from “buy and hold” strategies toward formal investment vehicles. Heavy losses in thematic stocks during last year’s rally have also reshaped investor preferences.