Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey on Oct 5 cautioned investors against relying on finfluencers, anonymous investment tips and exaggerated promises of returns as household participation in capital markets continues to expand.
Speaking at the launch of SEBI's Project Jagrook at Panjab University in Chandigarh, Pandey urged investors to use regulated products, channels and entities to protect themselves from investment fraud.
He advised people to invest only in financial products they understand, diversify their portfolios, start investing early and remain invested for the long term.
Pandey also cautioned against making investment decisions merely because others were investing or based on recommendations without adequate understanding.
SEBI has also announced MUST, a programme aimed at promoting securities-market education among university students.
SEBI survey highlights investor knowledge gap
Pandey cited a SEBI survey showing a significant gap between awareness of securities-market products and actual participation.
Around 63% of households were aware of at least one securities-market product, but only 9.5% participated in the market. Just 36% of investors had high or moderate knowledge of securities markets.
The survey also highlighted an urban-rural divide, with market participation at around 15% in urban areas compared with 6% in rural India.
Investors also preferred learning about financial products in Hindi and regional languages, while awareness of SEBI's investor-focused initiatives remained limited.
Project Jagrook focuses on investor education
Project Jagrook will bring SEBI, stock exchanges, depositories, the National Institute of Securities Markets (NISM) and other organisations under a coordinated investor-education framework.
India's capital markets have expanded significantly over the past decade. Demat accounts have reached 23.8 crore, while the number of unique investors stands at around 15 crore.
Market capitalisation has increased from about Rs95 lakh crore in FY16 to around Rs472 lakh crore. Foreign portfolio investor assets have risen from Rs22 lakh crore to approximately Rs78 lakh crore.
Mutual fund assets under management have also climbed from around Rs12 lakh crore a decade ago to nearly Rs87 lakh crore.
Pandey stressed that greater market access must be accompanied by stronger financial awareness and informed investment decisions.
