Retail Investors Exiting Indian Equities Even When Markets Are Gaining – Why?

Retail Investors who were taking the Indian equity market to new highs have now turned into sellers. And that too at a stage when the Indian markets have started rebounding. Interesting, isn’t it? 

If you look at the numbers, during the month of October 2025, as per NSE, retail investors sold equities worth ₹13776 crore, while in November, they sold another bulk of ₹11544 crore. They have gone into a selling spree when the markets in general have started recovering. 

Despite Nifty and Sensex rising more than 4% in October and 2% in November, the retail investors kept on offloading domestic equities. 

Let’s try to understand what is leading these investors to offload Indian equities and where they are investing now. 

Volatility Playing a Pivotal Role 

While the markets have shown signs of recovery, the market volatility is quite high, which could be a reason for the Indian retail investors to fly away from the domestic equities. 

While in the month of October, the broader indices gained well, in the month of November, they fell again. If we look at the BSE Midcap index, it gained 4.7% in October while remaining flat with 0.4% gains in November. Coming to the BSE SmallCap index, this one portrayed higher volatility by rising 3.22% in October, while falling sharply by 3.4% in November. 

Analysts are predicting that due to this heightened market volatility in the broader markets, the retail investors are booking profits even though overall markets are rising. 

And this is not just for the month of October and November; the markets have been quite unpredictable throughout the calendar year. From January to September, while Nifty and Sensex jumped close to 4% each but the BSE Midcap and smallcap indices dropped by 3% and 5% respectively. 

Shift to Safer Assets 

For retail investors, safety is a primary concern, and due to the highly volatile market conditions, they are shifting towards safer investment options. This is indicated by the massive rally seen in the gold and silver prices over the last few months. 

Especially the investors who used to invest directly into the domestic equities are now shifting their investments to these metals, which are performing extraordinarily. 

Having said that, the retail investors are more or less continuing with their SIPs, and for lump-sum investments, they are not choosing multi-asset funds over others to diversify their portfolio more and be resilient.  

The yellow metal has surged at a whopping 61% in this calendar year to date, while silver prices just skyrocketed by 96% during the year until now. This is perhaps one of the main reasons for retail investors exiting the Indian equity market. 

IPO Frenzy

While volatility, safe asset classes are all on one side, the other side of the Indian equity market is now all about IPOs. By far, there are 95 companies that have launched their IPOs, and retail money has followed the trail. These 95 IPOs overall worth is around ₹1.61 lakh crore, which is the highest in any calendar year till date, even exceeding last year’s total of ₹1.59 lakh crore. 

It is not just the retail investors but also FIIs heavily selling Indian equities and moving into the primary markets for the new IPOs, which also sets the stage for the retail investors. 

Final thoughts  

While there are many reasons behind the exit of the retail investors from the Indian equity market, analysts predict that these moves are quite constructive. The markets are evolving, with the primary market becoming a prominent ground for investments, and safer asset classes helping retail investors navigate volatility. However, experts think that retail investors are going to make a comeback and start buying at a dip, which can further boost the market going forward.

Source: https://www.moneycontrol.com 

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