Bihar is now among the top 10 states in terms of investor base, surging past better-off states like Delhi, Haryana, and Punjab.
Kindly note the image has been published only for representational purposes.. Photograph: Sergei Tokmakov/Pixabay
A government job may be the most sought after vocation for many youth, but Akshay Kumar, a resident of Bhojpur district in Bihar, has recently given up a permanent sarkari role to focus on his new booming business on a full-time basis.
Kumar, who had started a franchisee operation for brokerage firm Motilal Oswal Financial Services during the COVID-19 pandemic in a district better known for its films such as Ganga Maiya Tohe Piyaari Chadhaibo and Piya Nirmohia, says his venture has clocked a tenfold jump in stock market trades since then.
The relative return of investment (RoI) on his government job clearly paled in comparison.
Kumar’s experience resonates for many across Bihar — the state with the lowest per capita income in the country is witnessing an unprecedented surge in stock market investments.
Between 2019-2020 (FY20) and May this year, the total number of registered investors in Bihar has risen by a whopping 678.8 per cent, from a mere 700,000 to 5.2 million stock market players, according to data from the National Stock Exchange Market Pulse publication.
This is the sharpest surge recorded across states during this period, and reflects a compound annual growth rate (CAGR) of 48.8 per cent.
Uttar Pradesh, whose investor base jumped from 2.3 million to 13.1 million over this period, has recorded the second fastest CAGR of 40.1 per cent, and has also surged to the second highest rank over this period, pipping Gujarat.
In fact, Bihar is now among the top 10 states in terms of investor base, surging past better-off states like Delhi, Haryana, and Punjab, which have between 3 million to 5 million investors.
Bihar had a per capita net state domestic product of just over Rs 60,000 per year in FY24. It was Rs 4.6 lakh for Delhi, Rs 3.19 lakh for Haryana and Rs 1.95 lakh for Punjab.
The highest number of investors in India still hail from Maharashtra, with nearly 19 million, and Gujarat stands third with 10 million investors.
Gujarat has become the third state to cross the 10 million mark, according to NSE data.
West Bengal and Rajasthan are next with over 6.5 million investors each. Assam and Odisha are among the other states which have also seen an increase in recent times, according to NSE data; adding over 2 million investors each since FY20.
Bihar’s equity culture also extends to mutual funds. Around 89 per cent of Bihar’s mutual fund assets are invested in equity schemes, shows data from the Association of Mutual Funds in India.
More industrialised states appear to invest more in debt.
But Bihar’s equity investments’ share edges higher than Jharkhand (87 per cent), Chhattisgarh (86 per cent), and Uttar Pradesh (83 per cent).
As for Kumar, he is starting a second venture called ‘Plan Your Investment’ with a focus on investor education.
He was inspired after he met a six year old thumbing through the investing classic One Up On Wall Street and personal finance bestseller Rich Dad Poor Dad. Watch this space.
Feature Presentation: Aslam Hunani/Rediff
