A Study of Retail Investors' Awareness Regarding Fractional Shares In India

Abstract

The Indian stock market has witnessed remarkable growth in retail participation over recent years, with millions of new investors entering the equity markets. Fractional share investing represents an emerging concept that allows investors to purchase portions of individual shares rather than whole units, thereby reducing entry barriers for retail investors. This pilot study examines the awareness levels of retail investors in India regarding fractional shares and explores their perceptions about this innovative investment mechanism. A structured questionnaire was administered to 150 retail investors across different age groups, income levels, and investment experience categories in Pune, Maharashtra. The findings reveal that only 28% of respondents demonstrated adequate awareness about fractional shares, with significant knowledge gaps existing across all demographic segments. Younger investors aged 18-30 years showed relatively higher awareness at 34%, while investors above 50 years exhibited minimal understanding at just 19%. The study identifies key barriers including lack of information, regulatory uncertainty, and preference for traditional investment methods. Educational qualification and investment experience emerged as significant predictors of fractional share awareness. The research provides foundational insights for financial service providers, regulators, and policymakers considering the introduction of fractional share trading in India. Further large-scale studies are recommended to validate these preliminary findings.