Why are losses still so high despite SEBI’s new measures? It’s interesting to see that two-year growth in trader participation is positive despite YoY declines.
Despite SEBI’s recent regulatory measures, retail investor losses in India’s equity derivatives market remain significant. A SEBI study for FY 2024–25 revealed that 91% of individual traders incurred net losses, totaling ₹1.05 lakh crore - a 41% increase from the previous year. This trend underscores the persistent risks associated with leveraged instruments like futures and options.
SEBI has introduced several reforms to mitigate these risks, including rationalizing weekly index derivative contracts, standardizing expiry days, increasing minimum contract sizes, mandating upfront collection of option premiums, removing calendar spread margin benefits, and monitoring position limits intraday. Despite these efforts, trading volumes remain elevated, indicating continued participation in derivatives markets.
These trends underscore the need for enhanced investor awareness and prudent risk management practices. Trading in derivatives involves substantial risk and may not be suitable for all investors.
Source: SEBI study, NISM
2 Likes
Yeah, that’s the reality. Many traders underestimate how quickly leverage can turn against them it’s not just about strategy, but discipline and risk control. not many realize that even small daily losses in options can compound fast. The data just makes it clear how risky it can get.
3 Likes
India’s ETF market has crossed ₹10 lakh crore in total investments, according to a recent report. What stands out is not just the size, but who is driving this growth.
Retail investors.
In just three years, the total money invested in ETFs has doubled. Trading activity has also jumped sharply, showing that more investors are actively using ETFs rather than holding them passively.
The number of ETF investor accounts tells the same story. It has grown from about 41 lakh in 2020 to over 3 crore today. This shows ETFs are no longer a niche product used only by large institutions.
While stock-based ETFs still attract most investors, interest in gold and silver ETFs is rising fast. Gold ETFs have crossed ₹1 lakh crore, and silver ETFs have grown rapidly as well. Together, they now make up a meaningful share of the ETF market.
The takeaway is simple. More Indian investors are choosing ETFs because they are easier to understand, cost less, and fit well with long-term investing.
The ₹10 lakh crore milestone is not just about size. It shows how investor behaviour in India is changing.
4 Likes
Retail Investors Flock to IPOs, Driving FY26 Investments to a Record ₹34,840 Crore
Record retail inflows into new issues come alongside outflows from secondary markets and muted returns.
Indian retail investors have invested a record of ₹34,840 crore in IPOs so far in FY26, seeking higher returns. At the same time, ₹13,000 crore has moved out of the secondary market due to volatility and weak listings, as investors shift focus to new issues for potential gains.
Retail Investors Flock to Primary Markets in Record Numbers
Indian retail investors are demonstrating a significant shift in their investment strategy, as they are increasingly turning to the primary market. In FY26 so far, they have invested an unprecedented ₹34,840 crore in the primary market.
This figure surpasses the ₹34,336 crore invested in the entirety of FY25 and dramatically exceeds the ₹18,057 crore seen in FY24.
In FY26 (April–November) so far, investments by retail investors in the primary market touched a record Rs 34,840 crore, compared with Rs 34,336 crore in FY25 (April–March) and Rs 18,057 crore in FY24 (April–March).
In contrast, retail participation in the secondary market has been weak. So far in FY26, retail investors have withdrawn around ₹13,000 crore, compared with strong inflows of ₹1.25 lakh crore in FY25 and ₹47,241 crore in FY24.
The Exodus from Secondary Markets
The surge in primary market participation starkly contrasted with subdued activity in the secondary market. So far in FY26, retail investors have pulled out nearly ₹13,000 crore, a reversal from the strong inflows of ₹1.25 lakh crore in FY25 and ₹47,241 crore in FY24. The market volatility and inconsistent returns seem to be driving investors to look for new opportunities.
Reasons Behind the Primary Market Boom
Analysts indicate that this shift is motivated by the pursuit of better returns. As mid- and small-cap stocks underperform in the secondary market, investors are increasingly exploring alternative avenues. Siddharth Bhamre, Head of Research at Asit C. Mehta Investment Intermediates, points out that even if IPOs don’t deliver big long-term gains, investors are still earning debut returns of 10-15%, creating a compelling incentive for higher subscriptions in upcoming IPOs.
IPO Activity in 2025
In 2025, the primary market witnessed robust activity. A total of 103 companies launched mainboard IPOs, raising over ₹1.76 lakh crore. The Small and Medium Enterprise (SME) segment saw even higher participation, with 267 companies raising a record of ₹11,435 crore. While many IPOs delivered listing gains, the overall performance varied. Out of 108 mainboard listings, 72 opened above their issue price, some surging between 30-70% on the first day, while 36 listed below their issue price.
Secondary Market Performance Analysis
In contrast, the secondary market in 2025 experienced a selective rally, with gains concentrated in a few stocks. Nearly 90% of the listed companies were trading more than 20% below their 52-week highs. Many stocks fell even more sharply, with hundreds trading 50-75% or even nearly 75% close to their peak levels. According to Nirav Karkera of Fisdom, global uncertainties and high valuations increased market volatility, causing frequent shifts between sectors but no widespread rally.
Future Outlook
Retail interest in the primary market is expected to remain strong as investors look for better returns and a more favourable risk-reward compared to the current secondary markets. However, a significant improvement in secondary market momentum is required for retail investors to increase their participation in the market again.
Impact
This trend is significantly strengthening the primary market, as strong demand for new issues could lead to more IPOs. At the same time, it also affects the secondary market by reducing retail participation and liquidity in the secondary market. These contrasting trends are shaping overall investors’ sentiments and market depth, with investors clearly favouring opportunities that offer quicker or more visible returns.
3 Likes