New demat accounts openings surged to a four-month high in June, driven by continued foreign investor activity in India’s bullish market. According to data from the Central Depository Service and National Securities Depository, over 42.4 lakh demat accounts were opened, marking a significant increase from the previous month’s 36 lakh and a substantial rise from 23.6 lakh a year ago.
This surge represents the fourth instance of monthly demat additions surpassing 40 lakh, following milestones in December 2023, January 2024, and February 2024. The total number of demat accounts now exceeds 16.2 crore, reflecting a 4.24 percent month-on-month increase and a 34.66 percent year-on-year rise.
Analysts attribute this growth to market stability under a newly formed government, boosting investor confidence and prompting individuals to enter equity markets. As the tax filing season approaches, investors are diversifying into equities to potentially enhance returns and manage tax liabilities. Brokers’ efforts to promote financial inclusion are also driving interest in equity investments.
The bullish broader market, characterized by strong returns and ongoing IPOs listing at premiums, continues to attract new investors and spur demat account openings. Analysts foresee further growth potential in demat accounts, driven by optimistic market conditions.
While acknowledging the surge, analysts note that not all new additions represent entirely new investors; some may involve account transfers between brokers or multiple accounts with different brokers. Overall, the trend underscores the robust interest in equity investments amid favorable market conditions.
