'Stock crash could throw middle class under the truck': Saurabh Mukherjea says boom has peaked

Despite India surpassing 20 crore demat accounts, Marcellus Investment Managers founder Saurabh Mukherjea believes the stock market participation story is largely saturated — and the popular narrative of a massive untapped retail wave is, in his view, “logically flawed.”

Speaking on a podcast with IndiaModney, Mukherjea questioned the widely held belief that India’s retail investor base will keep expanding dramatically. “We have 20 crore demat accounts. But only 6% of Indians invest in stocks. That’s obvious — formal employment in our country is still low,” he said, pointing to Reserve Bank of India data on household savings.

He argued that the 6% figure is appropriate when viewed in the context of India’s economic structure. “Roughly 100 million Indians — 10 crore — have reasonable jobs with steady pay. So if you’ve already brought 20 crore people into the stock market, that number is already saturated,” Mukherjea said.

While some investors operate multiple demat accounts, adjusting for overlaps still leaves around 15 crore unique retail participants — exceeding the estimated number of Indians with stable incomes. “That argument that there is a very large population yet to come into the stock market has no logical basis,” he said.

Mukherjea stressed that instead of chasing growth in retail participation, the focus should now shift to investor behavior and risk. “You have brought excitement in the market… but when this market crashes, these people will come under the truck,” he warned, referring to financially overextended individuals.

He drew a sharp contrast between India’s voting population and its working class: “64 crore Indians vote. Maximum 10 crore of those hold down jobs with reasonable steady pay,” highlighting the economic divide that tempers stock market growth potential.

With retail enthusiasm high and valuations rising, Mukherjea cautioned against overestimating the market’s capacity to absorb new retail money. “The story is now overdone,” he said bluntly.