Over 3 Million Demat Accounts Opened in September

In September 2023, the number of demat accounts in India surged to 12.97 crore, marking a 26% year-on-year increase. This substantial growth can be attributed to several factors, primarily the attractive returns offered by local equities.

Record Demat Account Openings

During the month of September, over 30.6 lakh new demat accounts were opened, slightly down from the previous month's figure of 31 lakh. Nevertheless, this marks the second consecutive month where incremental additions exceeded 30 lakh, indicating a sustained trend. The buoyant performance of the broader stock markets, coupled with the listing of several IPOs at attractive premiums since July, played a pivotal role in attracting many investors to the market

Influence of Brokerages

Brokerage firms, including discount brokers, ran aggressive account acquisition campaigns, further boosting the rise in demat accounts. Their efforts contributed to the increase in new investor participation in the stock market.

Record-Breaking IPO Activity

September saw an extraordinary surge in IPO activity, with 14 companies going public, the highest number in 13 years. These IPOs collectively raised around ₹11,800 crore, marking the highest amount since May 2022, when eight issues raised ₹29,511 crore. In addition to this, SME IPOs also witnessed a record-breaking surge, with 37 firms raising over ₹1,000 crore.

Youth Preference for Equities

The rise in demat accounts since the COVID-19 pandemic reflects a lasting trend, largely driven by the youth's preference for equities. Despite market volatility, the attractive post-COVID equity returns continue to attract young investors, who view market dips as buying opportunities. But, remember if there's a big crash in the market causing new investors to lose money, this situation could change.

Market Performance

In September,2023, the benchmark Sensex and Nifty gained 1.54% and 2%, respectively. BSE MidCap and SmallCap indices also showed strong performance, rising 3.7% and 1.1%, but in comparison to the index, many mid-cap and small-cap stocks rallied more than 15% in a month.

Economic Optimism

Market Experts are optimistic about India's economy, for the next few years because the country is investing a lot in building better infrastructure, the real estate market is improving, and businesses are spending more money. And these are likely to help companies, to make more money and keep the economy growing.

Millennials Driving Investment

Millennials have more money to invest, and they're showing a lot of interest in the financial markets. This positive trend is likely to continue, making India a great place for investment. Experts think that a big chunk of people's money for investing will keep going into stocks, showing how India's financial scene is changing for the better.

Nifty Performance

If we look at the stock market's performance over the past year, Nifty index has given a positive return of 13%. It means if you invested money a year ago, you would have made a profit of 13%. In the last six months, it has given a positive return of 10%. However, in the last month, the Nifty has gone down by 2.42%. So, while it has been doing well over the year and the past six months, currently market is showing correction.

Conclusion:

Demat accounts increase in India shows that more people are getting interested in investing because they see the potential to make money in the stock market, especially with all the new companies going public and many young people getting involved in investing. As India's financial markets keep growing, It will attract more and more investors.