Amid heightened global uncertainty and choppy equity markets, individual investors reversed course in FY26, turning net sellers in the cash market segment after six consecutive years of inflows, according to the latest Market Pulse fiscal report by NSE.
Net outflows by individual investors stood at ₹5,803 crore in FY26, a sharp swing from net inflows of ₹1.25 trillion recorded in the previous financial year.
“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 said.
Profit booking
The shift in retail behaviour comes against the backdrop of stretched valuations and intermittent global risk-off sentiment. After several years of sustained participation and strong inflows, many individual investors appear to have locked in gains as markets hovered near highs for much of the year.
The report suggests that retail investors were cautious as they selectively reduced exposure in the secondary market even as broader participation remained intact.
In contrast to the pullback in the secondary market, retail appetite for primary issuances remained robust. Investments in the primary market rose to ₹42,608 crore in FY26, up from ₹34,336 crore in FY25, underscoring continued interest in new listings and fundraising opportunities.
“Overall fund mobilisation through equity and debt instruments reached ₹20.3 lakh crore in FY26, up 9 per cent year-on-year,” the report said.
Primary markets
IPO activity, in particular, remained strong, with a record number of issuances and fundraising. “IPO activity remained robust in FY26, with 219 companies raising ₹1.8 lakh crore, the highest annual fund mobilisation on record,” it said.
The divergence between secondary market caution and primary market enthusiasm suggests that retail investors are becoming more selective rather than disengaged.
The NSE’s investor base expanded to 12.9 crore in FY26. However, the pace of new additions slowed. “New investor additions in FY26 totalled 1.6 crore, although the pace of additions moderated to an average of 13.5 lakh per month in FY26 versus 17.5 lakh last year,” the report said.
The exchange also said that the share of the top 10 States in total registrations has declined, indicating wider participation.
The report flagged continued concentration in trading activity. In the equity cash market, a small cohort of high-value traders dominates turnover. “The top 0.2 per cent of investors… contributed 78 per cent of average monthly turnover in FY26,” it said, while nearly 70 per cent of investors accounted for a negligible share of activity.
Published on April 21, 2026