Amid rising global uncertainty and volatile equity markets, individual investors shifted their stance in FY26, becoming net sellers in the cash market segment after six consecutive years of inflows, according to the latest Market Pulse fiscal report by the National Stock Exchange (NSE). In FY26, net outflows from individual investors totaled ₹5,803 crore, a stark contrast to the net inflows of ₹1.25 trillion recorded in the previous financial year.
The NSE report attributed this reversal to a combination of factors, including high market valuations prompting profit-taking and geopolitical uncertainties that have dampened investors’ risk appetite. “This reversal was driven by a combination of factors, including elevated market valuations that prompted profit booking, and bouts of geopolitical uncertainty that dampened risk appetite,” the report stated.
The change in retail investor behavior occurred against a backdrop of stretched valuations and intermittent global risk aversion. After years of continuous participation and substantial inflows, a considerable number of individual investors opted to secure gains as markets remained near historical highs for much of the year. The report indicated that retail investors appeared cautious, selectively reducing their exposure in the secondary market, while broader participation levels remained stable.
In contrast to the retreat in the secondary market, retail interest in primary market issuances remained strong. Investments in primary markets surged to ₹42,608 crore in FY26, up from ₹34,336 crore in FY25, reflecting continued enthusiasm for new listings and fundraising opportunities. “Overall fund mobilization through equity and debt instruments reached ₹20.3 lakh crore in FY26, up 9 percent year-on-year,” the report noted.
IPO activity also exhibited strength, with a record number of issuances and fundraising efforts. “IPO activity remained robust in FY26, with 219 companies raising ₹1.8 lakh crore, the highest annual fund mobilization on record,” the NSE report mentioned. The divergence between cautious secondary market behavior and enthusiastic primary market participation indicates that retail investors are becoming more selective rather than disengaging entirely.
The NSE’s investor base grew to 12.9 crore in FY26, although the pace of new additions slowed. New investor registrations totaled 1.6 crore for the year, with an average monthly addition rate dropping to 13.5 lakh per month, down from 17.5 lakh in the previous year. Additionally, the exchange highlighted a decline in the share of registrations from the top 10 states, suggesting broader participation among various regions.
However, trading activity remained concentrated, with a small group of high-value traders dominating the equity cash market. “The top 0.2 percent of investors contributed 78 percent of average monthly turnover in FY26,” the report revealed, while nearly 70 percent of investors accounted for a minimal portion of trading activity.
Published on April 21, 2026.
