International brokerage Macquarie has issued a bullish multiyear outlook for India's capital market sector, projecting a 16% compound annual growth rate across combined investment, wealth, and exchange revenue pools between fiscal years 2026 and 2030. The optimistic assessment, published despite near-term market sentiment dampeners from closing auction session volatility, identifies a massive pool of annual household savings ready to transition into formal market-linked financial products.
Monthly options contracts traded dropped from 397 million in October 2024 to 68 million by February 2025, while unique individual traders in the F&O segment fell from 61.4 lakh in Q1 FY25 to 42.7 lakh by Q4 FY25. Meanwhile, monthly gross SIP inflows surpassed Rs 25,000 crore in October 2024, climbed to Rs 26,459 crore by December 2024, and reached a record Rs 32,087 crore in March 2026.
The massive shift toward formal market participation is highlighted by an unprecedented surge in demat accounts, which expanded significantly from March 2020 through subsequent years.
According to the brokerage report, Indians save approximately $500 billion annually in financial assets, with nearly half of that total remaining locked in cash and traditional bank deposits. Macquarie analysts argue that this massive liquidity pool provides an extensive runway for market infrastructure firms, stock exchanges, and scaled digital brokers as domestic participation deepens.
The Three Drivers Behind the Growth Flywheel
Macquarie's structural thesis rests on three mutually reinforcing forces termed financialisation, equitisation, and productisation. Financialisation expands the overall volume of domestic savings entering formal financial channels, while equitisation drives higher direct and indirect capital allocations toward equities.
Productisation complements these shifts by raising customer engagement and expanding wallet share through diverse wealth-management, trading, and savings options. The brokerage notes that this trio creates a self-reinforcing flywheel that will allow covered financial infrastructure and brokerage companies to generate multiples of the free cash flow produced over the preceding four-year period.
Low Penetration Rates Highlight Long-Term Upside
Despite the rapid scaling of India's capital markets since fiscal year 2020, supported by digital onboarding, low-cost online brokerages, smartphone expansion, UPI adoption, and robust equity performance, the sector remains materially under-penetrated on a global scale. Macquarie highlights that only about 3% of India's population actively trades on the National Stock Exchange, roughly 4% own mutual funds, and average daily cash-market turnover represents just 0.2% of total market capitalization.
By comparison, cash-market turnover sits at 1.6% in the United States and 2.8% in China. With a working-age population numbering one billion and a growing middle and affluent demographic, the brokerage expects incremental savings to increasingly balance between physical assets and formal market instruments, reinforcing market resilience against foreign institutional selling.
Macquarie Pecking Order and Stock Ratings
Based on its multi-factor scoring model, Macquarie established a formal pecking order among major capital market equities, led by Groww parent Billionbrains Garage Ventures. Groww is favored as the top brokerage pick due to its customer-acquisition engine, cross-selling capabilities, margin-expansion runway, and free-cash-flow generation potential, receiving an Outperform rating with a target price of Rs 260 per share.
Multi Commodity Exchange, BSE, and the National Stock Exchange also received Outperform ratings, with target prices set at Rs 3,820, Rs 4,000, and Rs 1,965 per share, respectively. Meanwhile, Macquarie assigned a Neutral rating to Angel One with a target price of Rs 285 per share, noting that while the firm maintains a recognized franchise, recent share losses and compressed margins weaken its relative risk-reward profile.
