“The pace in demat account growth is picking up and 85% of accounts opened in the past six months are from new investors,“ said GV Nageswara Rao, MD & CEO, NSDL, a depository participant. “Growth in online trading has spurred a rise in demat ac counts.“
As on Sep tember 30, 2015, the total number of de mat accounts in the country stood at 2.51 o open demat ac crore. The rush to open demat accounts is nowhere close to the one seen in 2008, when registrations rose 38%.
“A completely new set of investors are showing interest towards equity investments as interest rates on fixed deposits are falling,“ said Dinesh Thakkar, chairman and managing director, Angel Broking. “Demat account growth at our brokerage this year has been at 10% on a base of 10 lakh customers. A large number of retail client enquiries are from below the 35-age group.“
Rao said NSDL had started a project called Market Eaklavya to catch hold of young investors.“We are approaching several colleges and educating students regarding equity investments. Recently, several of them have opened demat accounts with investments as low as `. 2,500.“
Stock brokers say that some part of the growth in demat accounts could also be attributed to retail investors converting their mutual fund holdings to demat.
“While definitely a new set of investors are looking at equity, activity from those wanting to convert their mutual fund holdings to demat too has increased,“ said Deven Choksey, MD, KR Choksey Shares and Securities.
A highly active primary market is usually seen as a key catalyst for demat account growth in the country. Though the primary markets are yet to revive, demat account opening has recently gone up as small investors anticipated more stability in stock markets, said experts.