Are India's retail investors 'incompetent' at investing? Zerodha's Nikhil Kamath answers

Not everything about India's retail investors is FOMO. According to Zerodha's Nikhil Kamath, their picks indicate a strategy that leans towards businesses with strong brand recognition and consumer appeal. 

In a post on X, Kamath said some of the top holdings of Indian retail investors included prominent firms such as Reliance Industries, HDFC Bank, Larsen & Toubro, TCS, and Infosys.

"Contrary to the general belief that retail investors are incompetent at investing, their top holdings tell a different story," Kamath said. Retail investors, according to the post, owned stocks worth ₹30 lakh crore, which account for 7.7% of the total value of all listed companies in India.

NSE data shows that in the five years between 2019 and 2023, over 120 million investors were registered. In January 2024 alone, more than 5.4 million investors were added.

As per BSE, as on February 9, 2024, the number of registered investors stood at nearly 161 million.

Association of Mutual Funds in India (AMFI) said that as of January 31, 2024, as many as 79.2 million SIP accounts were active through which individuals were investing in various mutual fund schemes in India.

The month witnessed record SIP contribution to the tune of Rs 18,838 crore from these accounts, AMFI data further revealed.

This contribution was 36 per cent higher than the contribution recorded from SIPs in January 2023.