Explained: Not reel, now focus on ‘real return’! Gen-Z’s share in the stock market reaches 40%

In recent times, one word has been heard a lot in the country and that is Gen-Z. At Jantar Mantar, this youth generation showed not only the country but the whole world how important their role is in the world’s largest democratic country and how much it is going to increase in the coming days. The proof of this is that if we look at the data of the country’s stock market, this Gen-Z has seen the highest participation since Covid. At present, this youth of the country is carrying the stock market on their shoulders. If we look at the figures, in just a few years the current stock market has reached more than 40 percent. This means that more than 10.50 crore investors in the stock market are this youth group. Let us try to understand the role of Gen-Z in the stock market…

Gen-Z emerges as a force

According to a report by India Brand Equity Foundation, India’s investor profile is increasingly shifting towards the young, tech-savvy generation. Industry reports suggest that the average Indian investor at present is barely in his early 30s, and almost half of them are under 30. A recent market analysis found that the Gen-Z segment has emerged as a major force, increasing from 25 per cent of NSE-registered investors in FY2020 to 40 per cent by FY2025. According to experts, by the end of financial year 2026, this figure has reached about 45 percent. Reserve Bank of India (RBI) data also confirms a major demographic shift: the share of sub-30 investors increased from 22.6 per cent in March 2019 to 38.9 per cent by July 2025, with the average investor age falling from 38 to 33.

What do these figures say…

• Youth Participation: There are 600 million people under 25 years of age in India and their market presence is increasing rapidly. For example, NSE India reported a 43 percent increase in new demat accounts in 2022, which was due to people in the age group of 18-30 years. This age group has more than 70 percent new users on trading apps like Zerodha, Groww and Paytm Money.
• Digital Access: Mobile and online platforms dominate. App-based brokers now account for 80 percent of all retail equity investors. 55-60 percent of new Systematic Investment Plan (SIP) registrations come from outside the top 30 cities.
• Growing Assets: Young investors now hold a large share of investment assets. In 2025, Millennials and Gen-Z together will control half (48 percent) of all mutual fund assets (Rs. 75.35 lakh crore ($862.64 billion)). In 2025 alone, Indians under 35 will open 40 percent of all new SIP accounts.

Every group has its own preferences:

• Group 1: Employed millennials in metros and tier-1 cities, who are digitally savvy and focused on wealth creation, have the highest exposure to mutual funds.
• Group 2: Employed Millennials in Tier-2 and smaller cities are confident, but are still gaining investment experience.
• Group 3: Young employed Gen Z are the new earners who are coming into the market and showing increasing interest in SIP.
• Group 4: Employed Gen
• Group 5: Self-employed professionals Mid-career investors with a balanced risk appetite.
• Group 6: Gen Z students are young people who are starting to invest early and respond quickly to market trends.
• Group 7: Experienced investors in business who demonstrate the highest risk appetite.

Digital-first platform and expectations

According to the IBEF report, the new generation invests entirely through digital channels. Mobile-first fintech platforms have made it easy to invest with just a smartphone. Regulators and startups say young investors demand a faster, app-like experience. Industry surveys show that about 35% of new investors turn away during ‘Know Your Customer’ (KYC) verification due to slow and difficult processes. Investors who remain expect fast and easy onboarding. If a platform is slow or involves too much paperwork, youth leave it and move on.

Platforms are changing themselves. New digital KYC methods and e-signatures have helped, and the results are visible in the data. Big fintech companies are now attracting most of the retail investments. According to a report, completely app-based brokers (like Groww, Zerodha, Upstox) now account for about 80% of retail equity investors. The use of mobile apps has also taken financial markets to smaller cities: many first-time investors are from tier-2 and tier-3 cities. In short, investing in India is now happening online in a big way and it has become a field of YouTube tutorials, mobile alerts and influencer advice, just like traditional advice desks used to be.

Changing investment priorities

India’s new investors are not only younger but also focused on building wealth in the long run. The survey shows that there has been a major shift towards disciplined investment methods. For example, Indians under 35 will open 40 percent of all new SIP accounts in 2025. 19 per cent of Gen Z people reported investing through SIPs (compared to 14 per cent of Millennials), and of these, about 84 per cent chose equity mutual funds. Now half of all mutual fund folios are held by investors under 30 years of age.

Young Indians are leading this change. This generation is focusing on growing their money in the long run instead of earning quick profits. This is clearly visible from the distribution of his portfolio. Bain & Groww analysis shows that young employed investors invest 55-65 percent of their wealth in mutual funds. Although first-time investors often start with simple SIPs, many people end up investing larger lumpsum amounts later on. In the last two years, the share of lump sum investments in equity funds has increased by 11 percentage points, almost at par with SIP investments.

The youth also have more risk taking capacity. Recent data shows that 58 percent of Gen Z’s investments go into stocks or equity funds, which is more than what they invest in gold or other assets. A survey by ‘Business Today’ found that 45 per cent of Gen Z prefer stocks/SIPs over gold sustainability, and 72 per cent of 18-21 year olds say they have invested in equities. Influenced by online content, many Gen Z investors are moving towards high-growth funds. Among these groups, small-cap and mid-cap fund holdings are growing the fastest.

Economic impact and future prospects

This increasing number of young investors is having a big impact on the economy. According to financial analysts, new retail investment provides necessary funds to small and medium industries. Greater participation of people in the market, especially from non-metro areas, is being seen as a stabilizing force. Retail investors and mutual funds have helped reduce volatility during global shocks.

India’s regulators and think-tanks consider this a boon. Increasing domestic investment can strengthen markets and promote financial inclusion. In fact, a study says that if retail participation continues to grow, it could help India achieve its larger economic goals. In the long run, increased investment by households could “increase per capita GDP by up to six times the current GDP on the way to becoming a $30 trillion economy by 2047”.