Indicating broader participation of investors in the capital markets, entities from smaller cities now make up for half of the total retail clients trading on the country's largest bourse NSE.
As per latest data compiled by National Stock Exchange (NSE) for fiscal 2012-13, 50 per cent of the total number of retail clients trading on the exchange's cash market platform come from the cities other than the Tier I and II categories.
Besides, 43.7 per cent of the total turnover of trades carried out by retail investors in the cash segment during the fiscal came from cities other than the Tier I and II categories, NSE data shows.
Tier 1 includes major metro cities like Bangalore, Chennai, Delhi, Hyderabad, Mumbai and Kolkata while Tier 2 cities include Ahmedabad, Jaipur, Kanpur, Lucknow, Nagpur, Pune and Surat.
"It's a sign that retail investors still have faith in the Indian markets and India's growth story," NSE said.
One of country's premiere bourse, NSE recorded a turnover of Rs 27 lakh crore in fiscal 2012-13.
Further, NSE said its retail turnover in the cash segment in proportion to India's GDP (Gross Domestic Product) rose to 19.66 per cent in 2012-13 as against 14.11 per cent in the previous fiscal.
According to market experts, more retail participation from small towns is on account that these places are the new pockets of growth in the country and are getting wealthier.