Demat accounts surge by 26% YoY to 12.97cr in September
The number of demat accounts in India has surged by 26% year-on-year, reaching 12.97 crore in September, mainly due to the appealing returns from local equities. Data from NSDL and CDSL showed that over 30.6 lakh demat accounts were opened during the month, a slight decrease from 31 lakh in August. Analysts believe the increase is due to the buoyancy in the market, especially in broader markets, and a series of successful IPOs since July.
Record-breaking IPOs contribute to growth
September saw the highest number of IPOs in 13 years, with 14 companies going public and raising a combined amount of around Rs. 11,800 crore. This is the highest amount since May 2022 when eight issues raised Rs. 29,511 crore. Moreover, SME IPOs experienced a record-breaking surge, with 37 firms opting to get listed and raising over Rs. 1,000 crore. This marks the highest number since SMEs entered the market in 2012.
Youth's preference for equities fuels trend
VK Vijaykumar, chief investment strategist at Geojit Financial Services, thinks that the rise in demat accounts since COVID-19 indicates a lasting trend driven by young investors' preference for equities. Despite market fluctuations, enticing post-COVID equity returns continue to attract young investors who view market dips as buying opportunities. However, Vijaykumar cautions that a major crash could result in heavy losses for many new investors and potentially create a negative situation.
Foreign investors exit amid crude oil surge
In September, foreign investors withdrew from Indian markets due to a spike in crude oil prices. Globally, equities fell with the dollar reaching over a 107 mark and the US 10-year yield climbing to a 16-year high on expectations of higher interest rates remaining elevated longer than anticipated. Deepak Jasani, head of retail research at HDFC Securities, stated that with the upcoming September earnings and elections, market volatility and occasional opportunities in both primary and secondary markets are expected.
