New demat additions stay below 2025 average for third straight month in May

Around 2.3 million new demat accounts were opened in May, below the 2025 monthly average, as subdued markets and geopolitical uncertainties weighed on retail participation

The pace of new dematerialised (demat) account additions remained below the previous year's average for the third consecutive month in May 2026, signalling a moderation in retail investor participation.

 

Around 2.3 million new demat accounts were opened during the month, lower than the 2025 monthly average of 2.5 million.

 

Demat accounts hold shares and other securities in electronic form.

 

Market participants attributed the slowdown to a relatively subdued environment over the past 18 months, along with persistent geopolitical uncertainties that have weighed on investor sentiment.

 

The moderation in new account openings is expected to continue over the next few quarters, as several factors are likely to keep retail investors on the sidelines.

 

These include ongoing geopolitical tensions, concerns over a potentially weak monsoon, and subdued corporate earnings growth amid higher energy prices following the Iran conflict.

 

In addition, worries about employment prospects — particularly in the technology sector as companies increasingly adopt artificial intelligence (AI) — are affecting investor confidence.

 

Given that a large proportion of new demat accounts are opened by salaried individuals, concerns over job security could continue to restrain fresh participation in the equity markets in the near term.