India’s Capital Markets Revenue May Grow 16% Annually Through FY30: Macquarie

India’s capital markets could expand rapidly through FY30 as household financialisation, retail participation, SIP adoption and broader investment products increase the country’s market-linked savings pool.

India’s Capital Markets Poised for Strong Growth Through FY30

India’s capital markets are expected to witness sustained expansion over the next few years, supported by increasing household participation in financial assets, deeper equity-market engagement and a broader range of investment products.

According to Macquarie Research, the country’s capital markets revenue pool could grow at a 16% compound annual growth rate (CAGR) between FY26 and FY30.

The growth outlook reflects the gradual shift of Indian household savings from traditional avenues towards market-linked financial products.

Rising Financialisation to Drive Capital Market Expansion

One of the key factors supporting the growth of India’s capital markets is the increasing financialisation of household savings.

Indians save approximately ₹44.19 lakh crore annually in financial assets, equivalent to around US$500 billion. Nearly half of these savings are currently held in cash and bank deposits.

Macquarie expects the growing formalisation of savings and rising income levels to gradually expand the pool available for financial-market investments.

Higher Income Supporting Investment Participation

Increasing GDP per capita is also contributing to changes in household investment behaviour. As income levels rise and financial awareness improves, more individuals are gaining access to equities, mutual funds and other market-linked products.

The brokerage noted that India’s capital markets still have considerable room for expansion because participation remains relatively low compared with the country's large population.

Around 3% of the population is active on the National Stock Exchange (NSE), while approximately 4% of Indians own mutual funds.

Demat Accounts Reflect Growing Retail Participation

The rapid rise in demat accounts provides another indication of increasing retail participation in India's capital markets. The number of demat accounts has climbed from approximately 21 million in FY13 to around 225 million in FY26.

The substantial increase reflects wider access to digital investment platforms and greater awareness of equity and other securities among individual investors.

However, the growth in account numbers also highlights the potential for further expansion as more households begin participating actively in financial markets.

SIP Adoption Strengthens Mutual Fund Investment

Systematic Investment Plans (SIPs) have emerged as another important contributor to India's financialisation trend. Annual SIP inflows have increased significantly from less than ₹1 lakh crore in FY19 to approximately ₹3.5 lakh crore in FY26.

Monthly SIP contributions have also remained above ₹30,000 crore since the beginning of FY26, indicating sustained investor participation.

Long-Term Savings Becoming More Market-Oriented

SIPs allow investors to contribute regularly to mutual funds instead of making one-time investments. Their growing adoption indicates that an increasing number of households are using structured investment methods to build long-term financial assets.

The continued rise in SIP contributions could therefore provide a steady source of capital for India's equity and mutual fund markets.

Stock Exchange Revenues Expected to Expand

Macquarie Research also expects Indian stock exchanges to benefit from the broader expansion of capital-market activity. Exchange revenues are projected to grow at approximately 13% annually through FY30.

Transaction-related revenue is expected to increase at around 12% per year, while non-transaction revenue could grow at approximately 15% annually.

Data and Listings to Diversify Exchange Revenue

The increasing contribution of non-trading businesses could help exchanges diversify their revenue sources.

Areas such as market data, connectivity services, company listings and index-linked products are expected to play a larger role in exchange revenues.

This could reduce the sector's dependence on trading volumes and transaction-based income.

As India's capital markets become more sophisticated, exchanges may increasingly generate revenue from a wider range of market infrastructure and information services.

Closing Auction System Creates Near-Term Challenge

Despite the positive long-term outlook, Macquarie has identified a potential short-term disruption from the Closing Auction System.

The change could affect equity, derivatives and margin-trading volumes as market participants adjust their strategies and liquidity patterns.

According to the research, the impact could continue for approximately two quarters, giving investors and market intermediaries time to adapt to the revised trading environment.

Market Participants May Need Time to Adjust

Changes to trading structures can influence liquidity and order-flow patterns. As participants modify their strategies, transaction activity could experience temporary changes.

However, the report's broader outlook remains focused on the structural factors supporting India's capital-market expansion through FY30.

Financialisation Could Expand India’s Investment Ecosystem

The increasing movement of household savings towards financial assets has implications beyond stock exchanges.

Greater participation in equities, mutual funds and other investment products can expand the overall financial ecosystem while providing households with access to a broader range of investment opportunities.

The combination of rising incomes, digital access, growing financial awareness and increasing SIP adoption is creating a larger base of retail investors.

Broader Product Offerings to Support Growth

The expansion of financial products is another factor that could increase market participation. Investors are gaining access to a wider range of instruments and services through digital platforms and established financial institutions.

This broader product landscape could help channel a larger portion of household savings towards capital markets over time.

India’s Capital Markets Outlook Through FY30

Macquarie's projections point towards continued expansion of India's capital markets through FY30, with financialisation and rising retail participation acting as major structural drivers.

The sharp increase in demat accounts, growing SIP contributions and relatively low overall market penetration indicate significant scope for further participation.

At the same time, exchanges are expected to benefit from both transaction activity and growing non-transaction businesses such as data, listings and index products.

Conclusion

India’s capital markets are entering a period of expanding participation as household savings increasingly move towards financial assets. Rising incomes, SIP adoption, digital investment access and broader financial products could support sustained market growth through FY30, while temporary trading disruptions may create near-term adjustments