Demat account additions fall 40% in 9M 2025 amid volatile markets

Demat account additions dropped 40% in the first nine months of 2025 as volatility, weak returns, and fewer IPOs dampened retail investor participation

Demat account additions in nine months of 2025 fell nearly 40 per cent as weak returns and sustained volatility dampened retail investor enthusiasm.

 

Data from depository firms show that 21.8 million new accounts were opened between January and September — about 14 million fewer than the 36.1 million added during the same period last year.

 

Benchmark indices have swung sharply this year, with steep corrections in mid and smallcap stocks curbing the risk appetite of new investors.

 

“Over the last year, markets have delivered modest to flat returns across indices, and sentiment has turned cautious. This has resulted in lower participation from first-time investors, who typically enter the markets during strong bull phases. Moreover, the demat customer base expanded exponentially in the last few years, and hence the incremental growth rate is moderating for the time being,” said Suresh Shukla, chief business officer, SBI Securities.

 

 

There were 2.42 million average monthly additions in 2025, significantly lower than the record 4 million per month the previous year. While the slowdown appears steep, industry players said the current pace reflects a consolidation phase after three years of rapid expansion.

 

“The recent decline in demat additions reflects maturation, not retreat,” said Trivesh D, chief operating officer at Tradejini. “[Consider] recent IPO (initial public offerings) disappointments, foreign outflows and regulatory tightening on speculative plays, and you understand why first-time investors are taking their time. But this calibration is healthy.”

 

Demat accounts have more than tripled since 2021, fuelled by the post-pandemic retail investing boom and a wave of buoyant IPOs. Strong returns from the equities market after 2020 also helped growth. However, domestic markets have been largely flat over the past one year, leading to disappointment for new entrants to the stock market arena.

 

“The spectacular bull run of recent years created unrealistic expectations. What we are seeing now is investors becoming more patient, which ultimately strengthens market quality,” said Trivesh.

 

“The long-term trend of retail investor enthusiasm remains intact and we expect renewed retail participation once the market consolidates and returns improve,” added Shukla.

 

Applying brakes	Weak returns coupled with sustained volatility has weighed on account additions this year
First nine months of	Demat accounts (mn)
	Added	Total
2021	20	69
2022	23	103
2023	21	129
2024	36	175
2025	22	207
Source: CDSL, NSDL