India Crosses Milestone Of 100 Million Demat Accounts

In March 2020, soon before the emergence of Covid-19 in the country, India had 40.9 million demat accounts

In August, the number of demat accounts in the country surpassed 100 million for the first time. According to statistics supplied by depository firms National Securities Depository Limited (NDSL) and Central Depository Services, over 2.2 million new accounts were established last month, the largest in four months, bringing the total to 100.5 million (CDSL).

In March 2020, soon before the emergence of Covid-19 in the country, India had 40.9 million demat accounts.This expansion has been supported by the rapid spike in the market, longer workweeks because of the lockdown and mobility limitations, the transition to a work-from-home environment, the convenience of opening an account, the rise in mobile and broadband penetration, and a decrease in brokerage fees.

Although NDSL has a larger market share in terms of assets under custody, CDSL, a public corporation, has a higher market share in terms of the number of accounts (AUC). With an AUC of Rs 38.5 trillion at the end of August, CDSL managed 71.6 million demat accounts. The AUC of NSDL’s 28.9 million accounts, on the other hand, was Rs 320 trillion.

Meanwhile, The 100 million demat account total is not indicative of the total number of investors in the nation. There is a lot of redundancy because an investor is permitted to open demat accounts with several brokerages. Industry insiders estimate that there are between 60 and 70 million unique investors. This results in a penetration of the equity market of less than 6%. In addition to direct investments, domestic retail investors can access the stock markets through pension funds, insurance, and mutual funds (MF).