Demat accounts rise but incremental additions on declining trend: Eco Survey
2 min read 01 Feb 2023, 06:34 AM ISTThe number of demat accounts rose to 10.6 crore in November 2022, a sharp surge of 39 per cent on yearly basis, Economic Survey 2022-23 said on Tuesday
PremiumAs per the latest Economic Survey 2022-23, the number of demat accounts has seen a significant increase of 39% YoY and reached 10.6 crore in November 2022. A demat account is an electronic account that holds all the securities of an investor in a dematerialized form.
However, despite the surge in the number of demat accounts, the report indicated that the incremental additions have been declining during the current financial year (FY23) in comparison to the previous financial year (FY22).
This is believed to be due to the heightened volatility in the secondary market and weak performance in the primary market, which has been influenced by the current global headwinds. The survey suggests that this trend could be one of the factors contributing to the declining trend in the growth of demat accounts.
The growth in demat accounts, which rose to 10.6 crore by November 2022 with a 39% increase from the previous year, was attributed by market experts to attractive returns in the equity market, simplified account opening procedures, and an increase in financial savings, according to the Economic Survey 2022-23.
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The survey also revealed that 1.71 crore demat accounts were added during the current financial year (FY23) till November 2022, compared to the 2.2 crore additions during the same period the previous year.
During the April-December 2022 period, the Indian stock market showed robust performance, with Nifty 50 rising 3.7% and BSE Sensex climbing 3.9% compared to its March 31, 2022 level.
According to the survey, the proportion of individual investors in the cash segment slightly dropped to 37.5% in FY23 (April-November 2022), compared to 42.2% in the same period of the previous fiscal year.
The cash segment's turnover also decreased by 21%, amounting to ₹98.2 lakh crore between April and November 2022, compared to ₹124.3 lakh crore in the same period of the previous year.
On the other hand, the volume of equity derivatives experienced a significant increase, indicating a shift in interest from equity cash to equity derivatives among both individual and proprietary traders. Between April and November 2022, the turnover in equity derivatives rose to ₹20,980 lakh crore from ₹9,861 lakh crore in the same period in 2021.
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Amid global uncertainty, currency and commodity derivatives also saw an uptick in volume. During FY23 until November, the turnover in currency derivatives rose by 87% YoY to reach ₹280 lakh crore, and the turnover in commodity derivatives increased 42% YoY to ₹92.6 lakh crore.
(With inputs from PTI)
