Indian demat accounts cross 11 crore in January 2023

Even as India reached the 11 crore demat accounts mark in January 2023, CDSL crossed the psychological level of 8 crore demat accounts. With the total demat accounts touching 11.1 crore in January 2023, it has moved up sharply since touching the 10 crore demat accounts about 5 months back. According to the CEO of NSDL, Nehal Vora, this is a testimony of the enormous number of investors across various states and UTs contributing to the equity cult.

Meanwhile, the oldest central depository, National Securities Depository (NSDL), reported 3.1 crore demat accounts at the end of January 2023. While CDSL has taken a big lead in terms of number of demat accounts, it is NSDL that still leads in terms of assets under custody (AUC). For instance, as of January 2023, the AUC of CDSL stands at Rs40 trillion, while the AUC of NSDL is more than eight times that number at Rs321 trillion. 

In the last 6 months, an average of 2 million (20 lakh) demat accounts were added on a monthly basis. This is despite the turbulence in the equity markets as well as the global headwinds like inflation, central bank hawkishness and recession fears; not to talk about the Russia Ukraine war. The Adani Enterprise FPO had led to a surge in demat accounts, but the FPO had was called off.

It surely remains to be seen if these clients became active traders or investors in the markets overall, especially in the light of the ongoing volatility. While there could be some duplication, numbers are impressive even adjusting for that. Clearly, investors are betting on the market impact as India moves to becoming a $5 trillion economy. However, going ahead, market returns will determine whether new investors gravitate towards direct investing.