Demat Account Additions Hit 13-Month High In June Backed By Robust Rally In Markets

Demat accounts numbers surged alongside Sensex and Nifty in June. This marked 4th consecutive monthly gain by the market indices, highlighting the positive momentum in the market

The total number of active dematerialised (Demat) accounts in India surpassed 120 million for the first time in June. As per the data collected by the two major depositories, the Central Depository Service (CDSL) and National Securities Depository (NSDL), June witnessed the addition of 2.36 million new accounts, marking the highest monthly increase since May 2022, reported Bussines Standard. The total demat tally crossed 120.51 million, up 2 per cent from a month ago and 24.41 per cent from a year ago.

The number of Demat accounts surged alongside the benchmark Sensex and Nifty in June. This marked their fourth consecutive monthly gain by the market indices, highlighting the positive momentum in the market. As a result, more investors sought to open Demat accounts to participate in the upward trend.

As per the report, this is the longest period of consecutive monthly gains for the benchmark indices since October 2021, during which they recorded six straight months of growth.

The Nifty witnessed a 3.5 per cent rise, while the Nifty Midcap 100 and Nifty Smallcap 100 experienced even greater gains of 5.9 per cent and 6.6 percent respectively, as per the report. 

The month of June also witnessed the launch of several IPOs, many of which garnered significant attention from investors and received frenzied bidding. Notably, IPOs such as IKIO Lighting, ideaForge Technology, and Cyient DLM saw a remarkable response, with each attracting over a million applications from retail investors.

In June, the trading turnover in the equity cash segment also reached its highest level in 14 months, continuing its upward trend for the third consecutive month. As per the report, the average daily turnover (ADTV) for both the NSE and BSE cash segments stood at Rs 67,491 crore, marking the highest figure since April 2022. This represents a significant year-on-year increase of 42 per cent, indicating a positive shift in market sentiment. Additionally, the ADTV for the derivatives market reached a fresh high of Rs 259 trillion (notional turnover for the options segment), extending its upward trajectory for the 18th consecutive month.

According to industry players, this surge in the secondary markets and traction in the primary market has boosted the tally. Brokerage officials have also noted that several investors opened new trading and demat accounts for new IPOs.

V K Vijayakumar, chief investment strategist at Geojit Financial Services, as per the report said, "The surge in new demat accounts happens during market rallies. There is a direct correlation between new demat accounts being opened and market performance. The sharp rise in the Nifty from the March lows and stories surrounding the consequent wealth creation is attracting new investors. This trend will continue so long as the market remains resilient."