India’s investor base could double in the next three to five years as more households turn to equity markets, backed by solid economic growth and a regulatory focus on safe retail participation, Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey said on Monday. Speaking at the CII National Financing Summit, Pandey highlighted that India’s underpenetrated market offers vast potential for domestic investors, especially as savings increasingly shift from traditional assets to capital markets.

Pandey noted that India currently has around 135 million unique market participants, a figure expected to rise rapidly with improving financial literacy and digital access. “Going forward, this growth is the main reason how we would be able to deploy our internal savings into our capital market,” he said. He added that Indian households and domestic institutions now hold a higher share of listed equities than foreign portfolio investors (FPIs), marking a structural transformation in market ownership.

A recent SEBI survey underlined this shift, revealing that while 63 percent of Indian households are aware of securities markets, only 9.5 percent actively invest. However, another 22 percent have shown willingness to enter the markets within a year. Pandey said this growing enthusiasm places a “big responsibility” on regulators, issuers, and intermediaries to maintain investor protection, transparency, and high governance standards. “Investor trust must remain the cornerstone of India’s capital market growth,” he added.

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Despite global market volatility, Pandey said India’s capital markets remain resilient, supported by robust domestic fundamentals, demographic strength, and sustained investment momentum. He pointed out that close coordination between SEBI and the Reserve Bank of India helps track systemic risks such as liquidity stress and mutual fund redemption pressures. “There will always be external risks, but India’s growth story stands on solid ground,” Pandey said.

Emphasizing the regulatory approach to new technologies, Pandey said SEBI’s stance on AI-driven tools, algorithmic trading, and tokenisation is rooted in “innovation with accountability.” He warned that as digital participation grows, so do cyber and fraud-related risks, making investor education and secure market entry critical. “The next level of India’s capital market evolution will depend on innovation that is both responsible and inclusive,” Pandey concluded.

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