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The number of active dematerialised (demat) accounts has crossed 120 million for the first time in June. The country's two depositories — CDSL and NSDL — together added 2.36 million new accounts last month, the highest since May 2022. In August, the total demat tally had crossed 100 million for the first time. Since then, the industry has added an average 2 million accounts every month.
The buoyancy in the secondary markets and traction in the primary market boosted the June numbers, said industry players.
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The benchmark Sensex and the Nifty logged their fourth straight monthly gain in June to hit new record highs. This is the longest monthly winning run for the benchmark indices since October 2021 when they had gained for six straight months. The Nifty rose 3.5 per cent, the Nifty Midcap 100 5.9 per cent and the Nifty Smallcap 100 6.6 per cent in June. Average daily turnover (ADTV) for the equity cash segment rose to its highest level in 14 months in June to Rs 67,491 crore. Meanwhile, the ADTV for the derivatives market recorded a fresh high of Rs 259 trillion (notional turnover for the options segment) —rising for the eight straight month.
“The surge in new demat accounts happens during market rallies. There is a direct correlation between new demat accounts being opened and market performance,” said V K Vijayakumar, chief investment strategist, Geojit Financial Services. “The sharp rise in the Nifty from the March lows and stories surrounding the consequent wealth creation is attracting new investors. This trend will continue so long as the market remains resilient.”
The month also saw the launch of half a dozen initial public offerings (IPOs), many of which witnessed frenzied bidding by investors. The IPO of IKIO Lighting, ideaForge Technology and Cyient DLM saw more than a million applications, each, from retail investors.
Brokerage officials said several investors opened new trading and demat accounts for these IPOs.
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“The recent spate of successful IPO launches also aided the new account additions. If the Sensex and the Nifty continue to sustain at these levels or create new lifetime highs, the broader markets will pick up, leading to a big surge in participation from retail investors this year,” said Tejas Khoday, co-founder and CEO of broking firm Fyers.
The latest surge in demat accounts and trading volumes is a positive sign for the brokerage industry, which has gone through a challenging period due to regulatory tightening around accessing clients' securities and funds. Industry players said that the discount and tech-savvy brokers could be benefiting the most.
“Smaller brokers are gaining clients but the online platform players have an upper edge. Discount brokers now have a higher share of NSE active clients,” said Vijay Mehta, president of Anmi (Association of National Exchanges Members of India), an industry body for stock brokers. “Rise in investor awareness campaigns is one of the reasons for the increase in demat accounts in the country. There is a shift from traditional to modern ways of trading. Everything is now available at one’s fingertips.”
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