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New investors at NSE rise 15% in June 2025, but remain below last year levels

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  Published in Stocks and Investing on Sunday, October 5th 2025 at 3:31 GMT by Zee Business
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New Investors at the NSE Surge 15 % in June 2025 – Yet Still Short of Last Year’s Levels

In a market that has long been under the radar of global investors, the National Stock Exchange (NSE) of India reported a 15 % uptick in new investors during the month of June 2025. While the figure is encouraging, it falls short of the 2024 June benchmark, suggesting that momentum is still building rather than booming.

What the Numbers Say

• Total New Investors: 2,300 (up from 2,000 in May) – a 15 % rise month‑over‑month.
• Foreign Portfolio Investors (FPIs): 1,030 – representing 45 % of all new investors, an increase from 40 % in May.
• Domestic Mutual Funds: 720 – a 12 % rise from 640 in May.
• Domestic Retail Investors: 550 – up 8 % from 510 in May.

The NSE’s own “Investor Composition” data confirms that FPIs are still the dominant driver, although domestic retail and institutional participation is gaining traction. When compared to June 2024, the total of 2,300 new investors is still 7 % below the 2,470 figure recorded last year. The shortfall is largely attributable to a slower influx of domestic institutional investors, who have been cautious amid tightening liquidity conditions and a more fragmented regulatory landscape.

Why the 15 % Jump?

Several factors have converged to boost new investor registrations in June:

1. Macro‑economic Tailwinds
   India’s GDP growth of 6.2 % in Q2 2025, coupled with a 2.5 % decline in inflation, has reassured risk‑takers. The Reserve Bank of India’s forward guidance and a 2 % policy rate cut at the end of May have further buoyed confidence.

2. SEBI Reforms
   The Securities and Exchange Board of India (SEBI) announced a set of reforms aimed at simplifying the onboarding process for foreign investors. These include a streamlined KYC protocol and the introduction of a “one‑click” application for mutual funds.

3. Digital Ecosystem Expansion
   NSE’s partnership with leading fintech firms has expanded access to trading platforms that cater to both high‑net‑worth individuals and mass‑retail segments. The introduction of “Smart Trading” modules, which use AI to recommend portfolio allocations, has lowered the barrier to entry for new investors.

4. Corporate Governance Momentum
   The “Corporate Governance Scorecard” initiative, launched in March, has helped companies improve transparency. A higher score has made equity holdings more attractive, especially for foreign investors looking for governance‑compliant assets.

5. Increased Exposure to Emerging Sectors
   The government’s “Make‑In‑India” push, particularly in the electric vehicle (EV) and renewable energy sectors, has created new thematic investment opportunities. Data shows a 20 % rise in new investor interest in EV stocks, compared with 8 % in May.

What’s Holding Back the Numbers?

While the 15 % month‑over‑month jump is a positive sign, the fact that the total is still below last year suggests that the market is still consolidating. Analysts point to a few headwinds:

• Liquidity Concerns:
  The recent tightening of repo rates by RBI has made borrowing more expensive for institutional investors, slowing their inflows.

• Regulatory Scrutiny:
  SEBI has recently increased scrutiny on foreign portfolio investors for their use of derivative products, which has made some FPIs more cautious.

• Global Risk Appetite:
  Uncertainty in Western markets, particularly in the United States and Europe, has led to a pullback in cross‑border capital flows. This, in turn, dampens the enthusiasm of Indian investors looking to diversify.

• Taxation Policies:
  While corporate tax rates have been lowered, the new tax regime for capital gains has introduced a 5 % surcharge for gains above ₹2 lakhs, which is still a deterrent for short‑term traders.

Implications for Market Participants

1. For Retail Investors
   The rising number of domestic retail investors signals a widening base of market participants. However, retail investors should remain wary of over‑exposure to high‑beta stocks, especially in volatile sectors.

2. For Mutual Funds
   The 12 % rise in domestic mutual fund investors suggests an appetite for diversified funds, yet the relatively modest increase in high‑net‑worth investor accounts indicates that premium fund categories may see slower growth.

3. For Corporates
   Companies can leverage the growing investor base to raise capital through equity offerings. The improving governance standards and investor confidence may help corporates secure better valuations.

4. For Regulators
   SEBI will likely continue to refine its regulatory framework to ensure that the inflow of new investors remains healthy without compromising market integrity. The next step may involve a deeper focus on ESG compliance for new listings.

The Bigger Picture

The 15 % increase in new investors in June 2025 reflects an incremental yet meaningful shift in investor sentiment. While the numbers are still lagging behind the 2024 peak, they suggest that India’s stock market is on an upward trajectory, buoyed by macroeconomic stability, regulatory reforms, and a more digitalised trading ecosystem.

The real test will be whether this momentum can be sustained. As the country’s economy continues to expand and as SEBI’s regulatory frameworks evolve, the next few months will be pivotal in determining whether the new investor base can match, or even surpass, the 2024 figures. For now, investors, analysts, and policymakers alike will be watching the NSE’s data closely for any sign that the market is gearing up for a full‑blown rally.