Demat account openings continue to rise despite market volatility; 4.36 mn added in September

September's additions reflect a 3.1 percent increase compared to the previous month and are consistent with the 12-month average of 3.66 million new accounts.

Amidst heightened volatility along with concerns around valuations and earnings, the growth in demat accounts continued unabated in September with more than four million new accounts getting added.

Data from depositories NSDL and CDSL showed that a total of 4.36 million new demat accounts were opened in September while the benchmarks Sensex and Nifty gained around 2.4 percent.

More importantly, this marks the fourth consecutive month where new demat account openings exceeded the four million-mark. The total number of demat accounts has now reached a record high of 175.43 million.

September's additions reflect a 3.1 percent increase compared to the previous month and are consistent with the 12-month average of 3.66 million new accounts.

Experts highlight that the surge in new demat accounts points to increased participation from retail investors, driving overall market growth. This trend suggests that more individuals are entering the market, spurred by a steady rise in initial public offerings (IPOs) and their premium listings, they say.

Some experts also believe that a portion of this increase may be due to investors opening multiple accounts amidst the IPO rush. In September, a total of 12 IPOs – highest in the current calendar year – were launched with the cumulative fund raising pegged at Rs 11,058 crore.

Analysts view the rise in demat accounts as a positive sign of growing equity market participation. More people are turning to investments in both primary and secondary markets, focusing on long-term wealth creation and retirement planning. As financial awareness continues to spread, the number of demat accounts is expected to grow steadily, they say.

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