New demat account additions in July highest in 6 months, shows data

Demat account additions continue to rise at a healthy pace with over 4.55 million additions in July, taking the total count to nearly 167 million, showed data by Central Depository Services (CDSL) and National Securities Depository (NSDL).

This is the fourth month in this calendar year when the new additions have remained above 4 million. The net additions last month were the highest since January when a record 4.68 million were added.

The continued trend in demat account additions indicates the rising investor participation in direct equities. While digital onboarding has facilitated easier participation, a robust initial public offering (IPO) pipeline and sustained rally in the markets are drawing many into the stock market fold.

Earlier this month, Ashishkumar Chauhan, managing director and chief executive officer, National Stock Exchange, said that the exchange now has investors across all pin codes of India, barring only 30 of which some are airports where no one has residence.

Robust capital flows from domestic and foreign portfolio investors (DIIs and FPIs) lifted equity markets in July. Despite the increase in capital market-related taxes, the benchmark Sensex and the Nifty rose over 3 per cent last month.

At the same time, the broader market Nifty Midcap 100 and the Nifty Smallcap 100 indices outperformed, gaining 4.5 per cent and 5.8 per cent, respectively. FPIs pumped in close to Rs 34,000 crore in July, while DIIs invested over Rs 20,000 crore.