India’s next investor wave will come from smaller cities, youth: EY | Personal Finance
India could add more than 100 million new long-term investors by 2035, with the next wave expected to come increasingly from smaller cities, women, younger earners and digitally connected households, according to EY India’s latest report.
The report, titled Wealth Inclusion in India: Expanding Investor Participation Beyond Metros, says reaching the new 100 million investors would require more than opening investment accounts or putting more financial products online. It argues that the bigger challenge is getting households to invest regularly, understand risk, diversify, and stay invested through market cycles.
According to the report, the opportunity is large because India’s digital financial infrastructure has expanded much faster than participation in wealth-creation products, and estimates that India has around 500-550 million active UPI users, compared with about 62 million individuals investing in mutual funds and roughly 50 million active equity market participants. EY uses the gap to illustrate how digital access has scaled while participation in market-linked investments remains relatively narrow.
The next investor base is outside the metros
The report highlighted that cities beyond India’s top 110 contributed 12 per cent of mutual fund Assets Under Management (AUM) in FY25, while districts outside the top 10 accounted for 70 per cent of NSE-registered investors trading in FY25, according to the report.
The age profile is changing too. Investors below 30 accounted for 38 per cent of the investor base in June 2026, compared with 23 per cent in FY19. In cities beyond the top 30 mutual fund centres, or B30 cities, women accounted for 25 per cent of investors in FY24, up from 20 per cent in FY19, according to EY.
SIPs also point to a growing preference for regular, recurring investments. They accounted for 35 per cent of individual mutual fund AUM, up from 19 per cent in FY19. EY says micro-SIPs of about $2.6, along with distribution partnerships covering more than 250,000 rural touchpoints, are helping bring first-time and underserved investors into the market.
Access is no longer the main constraint
EY report says India has largely addressed the infrastructure problem as Aadhaar, UPI, eKYC, DigiLocker and Account Aggregator have reduced the friction involved in opening accounts, moving money and sharing financial information. It says India’s investable assets reached nearly $5.2 trillion in FY25, with financial assets accounting for about 34 per cent of total household assets, up from 28 per cent in FY15. It also estimates that individual investors account for 18.7 per cent of India’s equity market through direct equity and mutual fund ownership.
The remaining barrier, according to EY, is more behavioural and advisory in nature. For a first-time investor, investing involves decisions around risk, time horizon, affordability, product suitability and market volatility. Unlike a payment transaction, the outcome is uncertain and unfolds over years. The report therefore identifies an advice gap as a major constraint on wider participation.
Wealth Stack to bridge the advice gap
The report sees AI as a way to extend financial guidance to a wider pool of investors, from risk assessment and portfolio analysis to personalised education and servicing. But it stresses that technology is meant to complement, rather than replace, human judgement and oversight. It proposes a “Wealth Stack” to build on India’s digital infrastructure and make investing easier to access and navigate. It would link existing systems for identity, payments and data with AI-enabled tools, advice and investor-protection mechanisms.
According to the report, the next phase of wealth inclusion needs to move from financial literacy towards financial capability. That means helping investors apply financial knowledge to decisions about savings, investment, risk and long-term goals.
