International Journal for Recent Development in Science and Technology

In March 2020, the Indian stock market experienced a significant downturn due to the COVID-19 pandemic.In the aftermath of this market crash, there has been a sharp increase in the number of Demat accounts in India, growing from 10 crore from August 2022 to16.2 crore as of June 2024 .This dramatic rise has shifted the market dynamics, with retail investors now accounting for 52% of daily transactions, overtaking the dominance previously held by Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs).According to Economic Survey 2023-24, retail investors' share in the equity cash segment turnover was at 35.9% in 2023-24 (FY24).The number of demat accounts with both the depositories rose to 1,514 lakh in FY24 from 1,145 lakh in FY23 This surge in retail participation allows individual investors to directly engage in wealth creation through capital markets, moving away from traditional bank deposits.Instead of depositing funds in banks, which would then lend to corporate at higher interest rates, retail investors now invest directly in companies via equity, mutual funds, and other instruments, earning returns through dividends and capital gains.This shift redirects savings from less productive assets like gold to more productive investments, enhancing capital formation and fostering economic growth.While traditional savings methods such as fixed deposits, Public Provident Fund (PPF), and National Savings Certificates (NSC) offer guaranteed returns with minimal risk, equity investments come with higher risk but the potential for significantly higher returns.The increased willingness of investors to accept these risks is driven by the higher returns offered by the stock market compared to fixed-income options.This study explores the factors driving the rise in retail investments, including investor awareness, objectives, and the types of investments preferred by retail investors in Telangana.The research is based on primary data collected through a structured questionnaire completed by 200 respondents from Hyderabad.