The preferred mode of investments was mutual funds, followed closely by equities - Investor Survey for SEBI 2011 and 2015

The preferred mode of investments was mutual funds, followed closely by equities - Investor Survey for SEBI 2011 and 2015

Comparison with the Previous Investor Survey

SEBI Investor Survey 2015

In 2011, the NCAER published the Investor Survey for SEBI, which was conducted in 2008-09. This section compiles some key results from that survey, contrasts those with the findings of the current survey and additionally, highlights the crucial differences between the two in terms of survey, sample and motivation.

While a number of key findings are similar between the 2011 and 2015 surveys, there are some crucial differences in investment awareness and behaviour.

Using the 2011 survey as a point of reference, the current survey’s questionnaire and sampling frame have been redesigned to account for broader objectives that are essential to regulators and policy makers.

The objective of SIS 2015 was broader by design and more comprehensive than the previous survey. It was meant to encompass a vast array of investor behaviour and actions (as enumerated above) and additionally include:

Reasons for non-investment in securities markets.

Understanding the interface between investors and market participants.

Finding out the impact of investor education / financial literacy programs on investments, investor grievances and awareness of redressal mechanisms.

The previous investor survey sampled 38,412 households from 44 cities and 40 villages. The survey encompassed 25 States/Union Territories (UTs) and did not include Jammu & Kashmir, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Andaman & Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli and Lakshadweep.

In comparison, the SIS 2015 includes all States and Union Territories of India except Lakshadweep and has a total sample size of 50,453. SIS 2015 covers 488 villages and 74 towns and cities.

This has created a more holistic view of the country’s investors and also allows for a significantly more robust estimation of the number of investing households.

To help understand and analyse the broader objectives of SIS 2015, the survey methodology used in the current survey was distinct from the previous study (and is unique amongst such studies). SIS 2015 uses a purposive sampling technique based on demat account data.

The objective of using such data is to increase the incidence of selecting investors in the total population to get a comprehensive view of their characteristics, behaviour and investment patterns.

The previous study used a focused sampling for the listings exercise by selecting blocks within cities / towns and then used a stratified sampling technique by creating bands of ‘investors’, ‘savers’ and ‘none’ to choose households accordingly for the final survey. Details are provided in Chapter 3 of this survey report.

While the previous survey had listed 70,159 households as the sampling population, the SIS 2015 has a listing of 2,04,694 households from across the country. This allows for a broader pool of survey participants to choose from.

In both the earlier and SIS 2015 surveys, there is a vast regional disparity in the proclivity to invest in securities markets. For instance, in the previous survey, 55% of investors were from the West zone while in the current survey, 51% of investors are from the West.

According to the previous survey, the estimated number of investor households in India was 2.45 crore (about 11%t of total households). That implied that 92.7 lakh households (or 6%) in rural India invest in the securities markets.

The 2011 survey stated that, “…after repeated listing in more than 50 villages across the country, it was found that the extent of participation in securities markets was extremely low. Hence it was decided to present the findings of investments and savings separately for rural households based on a carefully selected sample of 40 villages”.

In contrast, the SIS 2015 data uses a pan-India survey of large rural sample for analysis and estimation.

Probability Proportional to Size (PPS) sampling methodology has been used for the rural sampling in the current survey and the villages covered during the survey have not been restricted to those that have a close proximity to urban clusters. To get a true representation of the rural population, most of the selected villages are far from cities.

Though, as stated earlier, the estimated number of households may not be comparable across the two surveys but at a broad level, the estimated number of investor households in India as per SIS 2015 are 3.37 crore (2.36 crore urban and 100.3 lakh rural households) as compared to 2.45 crore (1.52 crore urban and 92.7 lakh rural households) estimated in the previous survey.

There are multiple areas where the 2015 survey findings closely align with the 2011 findings. The most important amongst these is the education - investment relationship.

According to the 2011 survey, “Education plays a significant role in influencing risk preferences. The risk appetite was the highest among investors with more than 15 years of schooling” and “26 percent of HH (households) with 15 years of educations in NCAER invest in secondary markets”.

The SIS 2015 data found analogous results with 25% of the highest educated group (15+ years of education) invested in securities markets.

In 2011, the preferred mode of investments was mutual funds, followed closely by equities. This pattern still holds true with very few investors engaging in bonds or derivatives in either survey.

Additionally, the dependence on traditional media like newspapers and the importance of financial intermediaries has remained consistent despite rising Internet penetration and changes in the brokerage industry.

However, SEBI website, which was not often visited by investors (according to the 2011 survey) is now a key source of information for investors.


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