Nearly 4.2 million (41.73 lakh) demat accounts were opened in December, as the Nifty soared past 21,000 and companies sold fresh shares nearly every alternate day through the month, demonstrating the enthusiasm among Indian retail investors for the inflation-beating asset class that is beginning to outshine bullion and property as the preferred store of value even for the average saver.
The sharp rally across sectors and a historic 11 public offerings in December acted as catalysts, drawing retail investors into the stock market in significant numbers. The total number of investor accounts at the end of the month totalled 139.3 million.
Nearly 4 million new investor accounts were opened with the Central Depository Services (CDSL), and an additional half a million accounts were opened with the National Securities Depository (NSDL). The total number of accounts opened in November was 2.8 million, compared with 2.6 million in October.
“The growth in the number of retail investors in the Indian stock markets is not surprising considering the broader indices gaining over 7% in December alone,” said Arun Chaudhry, chief business officer, m.Stock by Mirae Asset Capital Markets. “We also saw a rally in the mid- and small-cap stocks in December 2023 and a triumphant IPO season, both of which are retail favourites.”
Nifty gained 7% in December, while Nifty Midcap and Nifty Smallcap indices surged 6.5% and 5.19%, respectively. This euphoric growth was further fuelled by foreign portfolio investors coming back to Indian markets by pumping in nearly ₹58,498 crore in December in the equity segment.
Since the proportion of investors as a percentage of the population is still low compared with other countries, we have a long way to go, say market participants. “There is a perceptible shift in investor preferences of modern youth away from bank fixed deposits, gold and real estate, which were the preferred choices of their parents as the India growth story looks better than ever, promising to deliver superior returns to equity investors,” said Dr V K Vijayakumar, chief investment strategist, Geojit Financial Services.
The rally after the Covid crash, which took the Nifty from 7,511 in March 2020 to around 21,700, has delivered returns beating those from other asset classes. Since April 1, 2022, about 98.4 million demat accounts have been opened on CDSL and NSDL.
By Rajesh Mascarenhas
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