Ananth Narayan: Retail investor base triples, urges market diversification.

• India's equity investor base tripled from 4.2 crore during COVID to 14 crore, reflecting a structural shift of household savings into capital markets.
• Domestic capital inflows reached ₹8.8 lakh crore in FY25, offsetting FPI outflows and resulting in a record ₹7.5 lakh crore net equity demand.
• A growing mismatch between equity demand and supply, with a ₹2.9 lakh crore gap in FY25, is creating a seller's market and valuation pressures.
• Ananth Narayan advocates expanding investable asset classes (commodities, fixed income, REITs) and easing restrictions on mutual fund overseas investments to improve market efficiency.
• SEBI's data-driven approach to derivatives regulations addresses issues like small option trader losses and high expiry-day volumes; strengthening the corporate bond market is also crucial.

Why It Matters: Massive retail investment growth is reshaping India's financial landscape.