In July 2024, a revealing trend emerged in India's equity markets—while a large number of individual investors participated, their contribution to overall turnover was minimal. Out of 158 lakh investors trading in the capital market segment, 63.2% traded less than INR 1 lakh throughout the month, contributing a mere 0.4% to the total turnover.
This figure was slightly lower than the previous month’s 64.1%, showing a steady pattern. Additionally, around 25% of investors traded between INR 1 lakh and INR 10 lakh, adding just 2.2% to the total turnover. Together, these categories of investors made up 88.2% of the traders but contributed only 2.6% of the turnover.
In stark contrast, only 36,000 investors, or 0.2% of the total, traded more than INR 10 crore, yet they accounted for a staggering 75.5% of the total market turnover. This higher turnover bracket was dominated by proprietary traders, who drove 38.7% of the turnover, followed by foreign institutional investors (15.4%) and domestic institutional investors (14.7%). Individual investors, despite their large numbers, held just 18.7% of turnover in this bracket.
A similar pattern of concentrated activity was observed in equity options. Out of the 47.4 lakh investors trading in options, 45.7% traded under INR 1 lakh in premium turnover, contributing only 0.2% to the total. Around 31.6% of traders, dealing between INR 1 lakh and INR 10 lakh, accounted for just 1.9% of the premium turnover. These two categories collectively represented 77.3% of traders but held a minuscule 2.1% share of the total premium turnover.
On the other hand, the top 4.1% of investors, who traded over INR 1 crore in premium turnover, dominated the market with an 88.6% share of the total premium turnover. Interestingly, the number of investors trading over INR 10 crore dropped 9.5% month-over-month, contributing 73.2% of the turnover in July.
Proprietary traders continued to dominate the equity options market, accounting for 67.7% of premium turnover, followed by foreign investors (12.2%), individual investors (9.8%), and corporates (6.4%). Domestic institutional investors showed negligible participation in the options segment.
Read More: Use Warren Buffett Guru’s Formula to Find Undervalued Stocks
X (formerly, Twitter) - Aayush Khanna
LinkedIn - Aayush Khanna