Eco Survey: Retail participation in equities rises on buoyant stock market

In April-Nov 2021, nearly 22 mn individual demat accounts were added, the Economic Survey for 2021-22 noted

Retail investors' interest in the Indian securities market has seen a significant uptick, as 2.21 crore individual demat accounts were added in April-November 2021, underpinned by the buoyancy in the stock market, according to the Economic Survey.

"With continuing buoyant trend in Indian stock markets, participation by individual investors in the equity cash segment has increased and the share of individual investors in total turnover at NSE increased from 38.8 per cent in 2019-20 to 44.7 per cent in April-October 2021," the Survey noted.

The substantial increase in share of individual investors in 2020-21 and 2021-22 can partly be ascribed to the increase in new investor registrations witnessed since February 2020.

In April-November 2021, nearly 221 lakh individual demat accounts were added, the Economic Survey for 2021-22 noted.

Overall, the participation of retail investors in securities markets has seen a significant rise especially in the last two years, which is evident from the increase in the number of demat accounts.

Market experts said that on an average, 4 lakh new demat accounts were opened every month in 2019-20, which increased to over 26 lakh per month in the current financial year.

The higher participation could be attributed to buoyant stock markets. The benchmark stock market indices -- Sensex and Nifty -- surged by 17.7 per cent and 18.1 per cent, respectively during April-December 2021.

In addition, the net Assets Under Management (AUM) of the mutual fund industry rose by 24.4 per cent to Rs 37.3 lakh crore at the end of November 2021, from Rs 30 lakh crore at the end of November 2020, the Survey showed.

Further, net resource mobilization by mutual funds was at Rs 2.54 lakh crore during April-November 2021, as compared to Rs 2.73 lakh crore during the same period of the preceding year.

During April-November 2021, foreign portfolio investors (FPIs) made a net investment of Rs 24,124 crore in Indian securities, 82.8 per cent lower than what was made in the same period of the previous year.

As of November 2021, cumulative net investment by FPIs increased by 9.2 per cent to USD 288.4 billion from USD 264 billion at end November 2020.