Direct Equity Inflows Plunge 90%, Experts Urge Focus on Fundamentals

Direct Equity Inflows See Sharp Decline; Experts Advise Investors to Focus on Fundamentals, Not PanicMumbai: Indian stock markets have remained largely flat over the past year, leading to a significant drop in direct equity inflows from retail investors. Between January–September 2024, inflows stood at ₹1.16 trillion, but during the same period in 2025, they fell drastically to just ₹12,408 crore — a decline of nearly 90 per cent.Reasons Behind the DeclineMarket experts point out that the long rally in equities ended after September 2024, leading to a correction phase. The main reasons include:Concerns over high valuationsReset in earnings expectationsInvestor fatigue after the prolonged rallyThese factors, coupled with subdued 12-month returns and weak momentum, have slowed down direct equity investments.Expert ViewAjay Menon, MD & CEO – Wealth Management, Motilal Oswal Financial Services, said that lack of momentum and muted returns over the past year have weighed heavily on investor sentiment, resulting in lower flows.Advice for InvestorsMarket experts are clear on one point:Do not panic during this phase.Replace underperforming stocks with quality, research-backed companies.Stick to long-term investment strategies instead of reacting to short-term market fluctuations.