Despite volatile market conditions, the addition of dematerialisation, or demat accounts, showed a sharp spurt and rose to an 11-month high in October.
The number of demat accounts in October stood at 132.25 million, which includes 98.54 million accounts on Central Depository Services (CDSL) and 33.80 million in National Securities Depository (NSDL). This translates to a y-o-y growth of 27.98 million. The number of demat accounts rose by 30.56 million a year ago.
He added there might be some aberration this year as midcaps and smallcaps, the space where most investors participate, have been getting really good returns. “There will be increase on a y-o-y basis, because even now the equity penetration is very less,” said Dewan. However, the number of accounts being added will depend on how the markets will perform in that particular year.
The primary reasons, said Kranthi Bathini, equity strategist at WealthMills Securities, are firstly, the markets uptrend since March and digital transformation. Whenever the markets are in an uptrend, like this year it has been since March, the number of demat accounts tend to go up, he said.
Additionally, “digital transformation has been helping the companies to transform and add more clients in a very faster pace”, he added. The new digital applications that are onboarding new customers as well as traditional companies that are enhancing client addition in a hassle-free way have aided.
From March till date, Sensex has gained 9.34%, while Nifty increased 11.24%.