AP records 125% growth in equity investors in 3 years

Visakhapatnam: Andhra Pradesh has witnessed nearly 125% surge in the number of registered equity investors over the past three years. The state had approximately 31.75 lakh investors in Jan 2021, which has grown to 71.5 lakh by this Sep, marking an absolute growth of 39.74 lakh new investors, as per Bombay Stock Exchange data.The surge suggests that AP is rapidly emerging as a key player in the financial markets, with more individuals turning to investments for wealth creation and savings. The robust growth in investor numbers highlights a positive economic trend, reflecting increased financial literacy and growing confidence in stock markets among the state’s population. According to experts, the proliferation of smartphones and internet connectivity has made it easier for individuals to access financial information and stockbroking platforms, attracting the youth to the markets. Apart from the initial crash during the first few months of Covid-19 lockdown, the stock market has performed well, with some small caps outperforming benchmarks and delivering up to 50% CAGR over the past few years. While direct market investments appeal to risk-takers, mutual funds, offering various themes and risk profiles, have gained trust among investors.For example, domestic mutual funds had a stellar year in 2023-24, with assets surging by nearly 34%. This marks the highest growth for India since FY 2016-17. The robust performance was driven by a booming stock market and increased investor interest.However, the state’s total assets under management (AUM) in mutual funds, as of July 2024, stood at approximately Rs 85,000 crore, significantly lower than states like Maharashtra (Rs 26.3 lakh crore), Gujarat and Karnataka (about Rs 4.5 lakh crore each), Tamil Nadu (Rs 2.97 lakh crore), West Bengal (Rs 3.29 lakh crore), and Uttar Pradesh (Rs 3 lakh crore).Dr M Prasada Rao, a member of the state finance commission, said majority of new investors are young and first-time participants. “In a predominantly agrarian economy like Andhra Pradesh, traditional investment options such as land, gold, and bank/post office schemes still hold sway due to the perceived comfort and safety they offer. I encourage investors to conduct thorough fundamental and technical analysis before investing in mutual funds or equities. Success in the markets requires patience and discipline,” said the former rector of Andhra University.Dr Mamta, a faculty member at Dr Bhim Rao Ambedkar College, University of Delhi, recently conducted a study on young investors in the stock market. She found that new investors are increasingly using financial tools and apps to educate themselves. “Many young people entered the stock market for the first time during the Covid-19 pandemic, motivated by a desire for financial independence and early wealth creation. They tend to favour small-scale, long-term investments to mitigate risks and explore various investment avenues for additional income,” she observed.