Demat accounts increase by 2.1 million in May.
Along with a noteworthy increase in the Nifty-Sensex during the month of May, the number of demat accounts also increased at the same time. May saw the opening of 2.1 million new demat accounts, bringing the nation’s total number of demat accounts to 118 million. According to a report from Motilal Oswal Financial Services, this growth came after a three-month period of constant decline.
The number of active users on the NSE (National Stock Exchange) increased to 312 million in May, compared to 311 million in April, according to the report, reversing a trend that had been declining for the previous 10 months. Furthermore, May saw 22 trade days compared to 17 in April. The number of active customers in the brokerage sector as a whole fell by about 1.7% over the previous year.
Zerodha examined certain brokerage platforms and discovered a monthly decline of 1.1%, translating to a loss of 620,000 clients. As a result, Zerodha saw a 19.9% fall in market share as well as a 30 basis point drop. However, Angel One increased its user base by 43 lakh, representing a 1.2% monthly growth rate. This resulted in a rise of almost 10 basis points and a 13.8% increase in Angel One’s market share. In addition, the number of consumers at Upstox fell by 4.5%, or 2.1 million fewer people. As a result, Upstox had a 6.8% market share decline combined with a 30 basis point loss.
What is a professional opinion?
The continual fall in demat accounts over the past three months, according to Dr. Ravi Ravi Singh, Vice President of Share India and a stock market specialist, might be ascribed to worries about a probable market slump and the alluring interest rates offered by fixed deposits (FDs). People have stayed somewhat away from stock market investing as a result of these issues. The stock market, however, has had a successful year.
The stock market has performed well over the past month, with large- and mid-cap equities returning up to 30% over the past 12 months. People now have a rekindled interest in investing in the stock market as a result. Dr. Ravi Singh further mentioned that more demat accounts are opened at the beginning of a new fiscal year as more new investors are drawn to the stock market.
The month of May witnessed a significant increase in the number of demat accounts in India, coinciding with a notable rise in the Nifty-Sensex. After a continuous decline over the past three months, May saw the opening of 2.1 million new demat accounts, bringing the total number to 118 million. This growth in demat accounts indicates a renewed interest in stock market investing among individuals.
The report from Motilal Oswal Financial Services highlights that the number of active users on the NSE also experienced an uptick in May compared to the previous month, reversing a trend of decline over the past 10 months. With more trade days in May and an increase in active customers, the stock market showed signs of recovery and regained momentum.
However, some brokerage platforms experienced a decline in their user base. Zerodha, one of the examined platforms, witnessed a monthly decline of 1.1% and a significant loss in market share. On the other hand, Angel One saw a 1.2% monthly growth rate, leading to an increase in market share. Upstox, however, faced a decrease in the number of consumers and a decline in market share.
According to experts like Dr. Ravi Ravi Singh, the recent decline in demat accounts can be attributed to concerns about a potential market slump and the attractive interest rates offered by fixed deposits (FDs). However, with the stock market performing well, particularly in the large- and mid-cap equities, there has been a resurgence of interest in stock market investing. The opening of more demat accounts at the beginning of the fiscal year suggests that new investors are increasingly drawn to the stock market.
Conclusion
In conclusion, the increase in demat accounts in May reflects a positive sentiment in the Indian stock market. Despite the recent challenges, the market has shown resilience and delivered favorable returns. The surge in demat accounts signals a renewed interest and confidence among investors, marking a potential shift towards long-term wealth creation through stock market investments. It is essential for individuals to stay informed, seek professional advice, and carefully evaluate their investment strategies to make the most of the opportunities presented by the evolving market conditions.
