Demat accounts rebound in May, tally up 2.1 m

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During the month of May, alongside a notable upswing in the Nifty-Sensex within the stock market, there was a simultaneous rise in the count of demat accounts. A total of 2.1 million new demat accounts were opened in May, resulting in a cumulative tally of 118 million demat accounts across the country. A report from Motilal Oswal Financial Services indicates that this growth has occurred following a continuous decline over the previous three months.

As per the report, there was a reversal in the trend after a continuous decline of 10 months, with the number of active users on the NSE (National Stock Exchange) increasing to 312 million in May, compared to 311 million in April. Additionally, May had 22 trading days while April had only 17. Over the past year, the broking industry as a whole witnessed a decrease of approximately 1.7% in the number of active customers.

Analyzing specific broking platforms, Zerodha observed a monthly reduction of 1.1%, resulting in a decrease of 620,000 customers. Consequently, Zerodha’s market share experienced a decline of 19.9% along with a decrease of 30 basis points. On the other hand, Angel One added 43 lakh new customers, indicating a monthly growth rate of 1.2%. This contributed to an increase in Angel One’s market share by around 13.8% with a rise of approximately 10 basis points. Upstox also witnessed a decline of 4.5% in the number of customers, equivalent to a reduction of 2.1 million. Consequently, Upstox’s market share decreased by 6.8% along with a drop of 30 basis points.

What is expert opinion? According to Dr. Ravi Ravi Singh, a stock market expert and Vice President of Share India, the continuous decline in demat accounts over the past three months can be attributed to concerns about a potential market downturn and the attractive interest rates offered by fixed deposits (FDs). These factors have caused individuals to maintain some distance from investing in the stock market. However, the share market has performed well in the last 1 year. There has been a positive performance in the stock market in the previous month, with large-cap and mid-cap shares yielding returns of up to 30% over the past year. As a result, there is a renewed interest among people to invest in the stock market once again. Dr. Ravi Singh also noted that at the beginning of a new financial year, often new investors get attracted towards the share market, which is reflected in the increased number of demat accounts.