The Rise of Young and First-Time Investors in the Indian Stock Market after the COVID-19 pandemic

Abstract

In this research paper, the present investigation was undertaken to understand how the COVID-19 pandemic coincided with an unprecedented influx of young and first-time investors (FTIs) into the Indian stock market, driven by widespread digitalization, commission-free/low-cost trading, time at home, social media–driven narratives, and shifting risk–return expectations. This study examines (a) the demographic and psychographic profile of these entrants, (b) their motivations and information sources, (c) their financial literacy and risk tolerance, (d) technology adoption and platform preferences, and (e) the short-run and intended long-run investment behaviors and outcomes. Using a cross-sectional survey of 300 investors (150 FTIs aged 18–35; 150 experienced investors >35). Results revealed that the ease-of-use of mobile apps significantly increased the likelihood of being an FTI (B = 0.63, OR = 1.32, p < .01). Social influence strongly predicted trading intensity (r = 0.41, R² = 0.17, p < .01), while FTIs scored lower in financial literacy (M = 62.5) compared to experienced investors (M = 70.8), t(298) = –4.12, p < .01. Risk tolerance positively predicted equity allocation (β = 0.45, p < .01), and financial literacy moderated social influence, weakening its effect on speculative trading (interaction β = –0.22, p < .05).

These findings suggest that technology convenience and peer networks are major drivers of youth investing post-COVID, but lower financial literacy increases vulnerability to speculative behavior. Practical implications include the need for financial education, responsible platform design, and regulatory safeguards. Limitations relate to the cross-sectional design, reliance on self-reports, and underrepresentation of rural populations.