Gen Z and the Rise of Retail Investing in India: What It Means for the Future of Finance

India’s financial system is being rocked by a seismic shift—one not driven by institution money, but by young, digitally savvy people with mobile phone apps and a growing hunger for financial independence. To date, as of mid-2025, India’s demat accounts have crossed an eye-popping 15 crore, according to the latest available data from depository firms. This is five times the level of 2020, indicating a fundamental shift in how Indians, and especially young Indians, engage with financial markets.

Much of this growth is being led by Gen Z, individuals born between the years 1997-2012. With a natural digital savvy and access to global financial trends via social media, this generation is not only investing at a younger age, but also investing differently. Vehicles for building wealth like fixed deposits or gold are giving way to equities, ETFs, and even derivatives.

But as investing becomes increasingly commoditized, an important question is: Are young investors ready for these markets, or are they simply jumping into a bubble of hype?

Who Are These New Investors? Getting to Know Gen Z’s Financial Habits

Image source: Mint

Gen Z is the very first generation to have grown up solely in the digital era. They are mobile-first, data-driven, and influenced by community characteristics that are evident in their approach to finances. Instead of going through intermediaries or consulting family members, many of them use do-it-yourself trading apps such as Zerodha, Groww, and Upstox, where they can invest with just a few screen taps.

But this democratization of finances has come with its own set of problems as well. Most Gen Z investors turn to finfluencers, YouTube, Instagram, or Twitter influencers who dispense stock tips, market insights, and sometimes even live trading. According to a Livemint report, over 60% of young investors under the age of 25 say that their investment decisions are taken directly from internet content and not from any formal finance training.

This meme-stock investing trend, while fascinating, is not always regulated or fact-checked. A number of Gen Z investors are exposed to trading via memes, reels, or subreddits, oftentimes glossing over crucial subjects such as valuation, risk consideration, or macroeconomics.

This is where investment banking and financial literacy come in. Without an understanding of how markets work at a minimum level, most young investors are coming to the game with enthusiasm but minimal protection.

Why Gen Z Is Investing More Than Ever

So what’s fueling this retail investing frenzy among young Indians?

One of the key drivers is the increase in disposable income and access to side hustles. The majority of Gen Z employees are earning money from freelance, tech jobs, or creator platforms, so they can afford to experiment. On their end, traditional investment avenues like fixed deposits or fixed savings offer relatively low returns, so they seek alternative, higher-yielding options.

The pandemic also helped, courtesy of COVID-19. With more free time spent indoors locked up and growing curiosity in financial services on the internet, many young Indians began keeping abreast of market movements, watching YouTube finance channel videos, and experimenting with trading. This kind of behavioral shift continued post-pandemic, with more than 3 crore new demat accounts opened in 2023 alone, according to a report by Moneycontrol.

Besides, the investor’s cultural attitude has also changed. Stock market discussions are no longer relegated to CNBC or financial newspapers; it’s now a part of daily banter over WhatsApp groups, YouTube videos, and even Instagram memes. Investing is hip as it can be, and being an investor is a status symbol and also a means to create wealth.

This cultural change is encouraging, but also dangerous, if this enthusiasm isn’t complemented by good education or financial literacy.

Hazards of Skipping in Without the Basics

Excellent access, yes, breeds excellent risk, and the arrival of Gen Z investors in India is no exception. While enthusiasm about taking part in the market is to be encouraged, it’s often accompanied by ignorance of the basics.

The majority of new investors plunge into day trading, options, or cryptocurrencies without knowing the implications. According to a recent SEBI study, over 90% of retail investors have lost money in derivatives trading in FY 2023–24. The losses were mostly due to weak risk management and uninformed speculation, Business Standard reported.

Another trend to be concerned about is social media advice over-reliance. While finfluencers and YouTube gurus provide content, they usually don’t provide in-depth, technical aspects of financial markets. For instance, few of them talk about discounted cash flow models, enterprise value, or debt structuring, content that is the foundation of any investment banking course.

The result? Young investors who can possibly profit in the short term but lack the skill set necessary to build long-term wealth. Without formal training, investing is less science and more chance.

That’s why finance experts increasingly recommend the integration of formal finance education with self-education. A foundation of knowledge for financial systems, capital markets, and company valuation isn’t reserved for the professional; any investor wanting to build lasting wealth.

Building a Foundation: The Importance of Financial Education

It’s exciting to see India’s youth take control of their financial futures, but enthusiasm alone isn’t enough. Financial markets can be complex, volatile, and unforgiving for those who operate without a solid foundation. This is why understanding core concepts like financial modeling, valuation techniques, macroeconomic indicators, and risk assessment is essential.

Young investors often learn by trial and error, but the cost of mistakes in markets can be high. Rather than relying solely on influencers or short-form videos, it’s important to supplement this content with structured learning. Many finance professionals emphasize that to truly understand markets, one must learn investment banking, as it provides the complete toolkit for understanding how capital is allocated, how companies are valued, and how mergers, IPOs, and debt instruments are structured.

Formal financial education doesn’t just teach “how” to invest; it explains “why” investments work, how risk is priced, and how institutional players operate behind the scenes. With this knowledge, young investors are empowered to make smarter decisions, not just follow the crowd.

By acquiring foundational knowledge, Gen Z investors can graduate from being passive participants in the stock market to becoming active contributors in the financial ecosystem. This knowledge doesn’t just reduce investment risk, it multiplies long-term returns.

Career-Oriented Perspective: Turning Passion Into Profession

For many in Gen Z, investing starts as a hobby but quickly evolves into a passion. And for good reason, the world of finance is dynamic, fast-paced, and intellectually stimulating. But what many don’t realize is that this passion can be turned into a highly rewarding profession.

The skills developed through self-directed investing, research, analysis, and decision-making are highly valuable in roles like equity research analyst, portfolio manager, financial strategist, or M&A advisor. These career paths not only offer financial growth but also exposure to global markets and strategic corporate decision-making.

To pursue these paths, however, informal knowledge isn’t enough. Enrolling in a structured investment banking course can be a game-changer. A comprehensive program can offer:

• Hands-on training in financial modeling and valuation
• Simulated case studies based on real-world scenarios
• Mentorship from industry veterans
• Access to internships and placement opportunities

Courses that focus on both the theoretical and practical aspects of investment banking allow learners to bridge the gap between curiosity and capability. It’s the difference between knowing a stock is “going up” and understanding why it is, and how to evaluate whether that growth is sustainable.

How Gen Z Can Lead India’s Financial Future

Image source: ET Edge Insights

Gen Z isn’t just changing how investing is done; they’re redefining what finance means to the next generation. This cohort is more open to innovation, quicker to adopt technology, and increasingly vocal about economic issues. Their early engagement with markets sets the stage for deeper participation in shaping India’s economic narrative.

As more Gen Z investors embrace structured education and long-term planning, their contributions could extend beyond personal wealth to broader financial innovation, be it through fintech startups, socially responsible investing, or new-age investment products.

With India on track to become a $5 trillion economy, having a financially literate and market-savvy young population could be a defining factor in achieving that goal. Whether through building their own portfolios or managing billions in institutional capital, Gen Z has the potential to drive India’s financial future, ethically, strategically, and inclusively.

Conclusion: Investing in Knowledge Is the Best Strategy

The surge in retail investing by Gen Z is one of the most exciting developments in India’s financial story. This young generation is showing a keen interest in markets, wealth creation, and economic participation, things that once seemed distant or overly complex.

But to convert this interest into lasting impact, education must go hand-in-hand with access. Mobile apps have opened the doors, but only structured learning can take you inside the boardroom.

To learn investment banking or understand the analytics behind financial decisions is to equip yourself with the ability to see beyond the noise, beyond trends and influencers, to what truly drives value. Whether you’re a 22-year-old investing your first ₹1,000 or a finance graduate preparing for a career in investment banking, the best investment you can make is in yourself.

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