Active clients drop for ninth month but discount brokerages build dominance

With markets delivering lacklustre returns and cost of trading rising, investors have turned more cost conscious, say industry players

About 5.3 million fewer investors were active in March than they were nine months ago as sustained volatility weighed on sentiment. The number of active clients on the NSE, the country’s largest bourse, stood at 32.7 million, down 5.3 million. This was 14 per cent lower than 38 million in July 2022. This was the ninth straight month when NSE witnessed a drop in active clients—those that trade at least one in 12 months.

While the client base has been shrinking, discount brokerages have been able to cement their dominance. In July 2022, the top five discount brokers accounted for 58.2 per cent of active clients on the NSE. Their market share has now grown to 60 per cent. With markets delivering lacklustre returns and the cost of trading going up, investors have turned more cost conscious, say industry players. They say the drop in active client base will stem once markets once again become upward trending.