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The equity asset class in India refers to investments in stocks, or shares, of companies listed on Indian stock exchanges, such as the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE). Investing in the equity asset class involves buying shares in a company with the expectation that the company will perform well and the value of the shares will increase over time. This can be a more risky investment than the debt asset class, as the value of equities can fluctuate significantly due to changes in the company's performance, market conditions, and other factors.
However, investing in equities can also offer the potential for higher returns over the long term. Many investors in India, including individuals, mutual funds, and pension funds, choose to include some level of equity exposure in their portfolios to help diversify their risk and potentially achieve higher returns.