The country’s Demat account tally topped the one crore mark for the first time, in August, a report by Business Standard stated. Over 22 lakh new accounts, the highest in four months, were opened last month, taking the cumulative figure to 10.5 crore, according to GDSL and NSDL data.
India’s Demat account tally was 4.1 crore in March 2020 just before the outbreak of Covid-19 in the country, the report added.
According to BS, the sharp surge in the market, greater lean hours due to the lockdown and mobility restrictions, shift to the work-from-home set-up, ease of account opening, increase in mobile and data penetration, and a drop in brokerage rates have underpinned this growth.
“We witnessed a substantial increase in demat accounts in the past two years. It is equally important to note that NSDL’s custody value increased from ₹174 trillion in April 2020 to ₹320 trillion ($4 trillion) in August 2022. This indicates participation from both retail and institutional investors,” said Prashant Vagal, executive vice-president, NSDL.
In terms of the number of accounts, CDSL, a listed firm, has a higher market share but NDSL is bigger when it comes to assets under custody (AUC), noted BS.
At the end of August, CDSL operated 71.6 million Demat accounts with an AUC of ₹38.5 trillion. On the other hand, NSDL had 28.9 million accounts with an AUC of ₹320 trillion, it informed.
However, the report pointed out that the 100-million Demat account tally isn't representative of unique investor count in the country.
"As an investor is allowed to open Demat accounts with multiple brokerages, there is a lot of duplication. Industry players peg the unique investor tally between 60 million and 70 million. This translates into equity market penetration of less than 6 percent," said the BS report.
It also highlighted that the Demat account trajectory and investor count are interlinked. To illustrate, new Demat openings fell to a 16-month low of 1.8 million in June, following a sharp correction in the market. But thanks to a sharp rebound in the markets from their June lows, investor confidence has once again improved, it explained.