New demat account additions drop 33% in 2025 amid market volatility

NIfty Strategy for Next Week

Fresh demat account additions fell sharply in 2025, declining nearly 33 percent as weak market returns and sustained volatility weighed on retail investor participation.

Data from NSDL and CDSL showed that 30.63 million new demat accounts were opened during the year, more than 15 million fewer than the 46 million added in 2024, marking the first annual decline in new accounts since 2021.

Benchmark indices were marked by sharp swings through the year, with steep corrections in mid-cap and small-cap stocks curbing risk appetite among new investors. The Sensex and Nifty ended the year with gains of about 10 percent each, while the BSE MidCap index rose around 1 percent and the BSE SmallCap index fell about 5 percent.

Analysts attributed the slowdown in new account openings to heightened market volatility, geopolitical tensions, sustained foreign investor outflows, subdued earnings, and stretched equity valuations.

While IPO fundraising remained active across both the mainboard and SME segments, several listings delivered muted or negative returns, reducing retail enthusiasm for entering the market.

Experts said that without a revival in investor confidence and stronger performance from new listings, the pace of demat account additions could remain subdued.

Meanwhile, the combined number of demat accounts with NSDL and CDSL rose to 215.93 million during the year, up from 185.3 million a year earlier.