Demat accounts cross 17 crore mark in August as monthly additions remain above 40 lakh for sixth time

Investor participation has reached an all-time high in India amid the recent surge in initial public offerings (IPOs). Over 40 lakh new dematerialised accounts (demat accounts) were added for the sixth straight month in August, taking the total tally of demat accounts to a record-high of 17.11 crore, according to data from the depositories.

In August, 42.3 lakh new demat accounts were opened, a sizable rise against the 31 lakh accounts opened in August 2023. However, the number of demat accounts opened in August was slightly lower on a month-on-month basis.

In July 2024, a record-high number of 44.44 lakh new accounts were added, which took the total number of demat accounts to over 16 crore.

The demand account opening milestone has been reached just two months after the count had hit 16 crore in June 2024. Meanwhile, in July 2024, a record-high number of 44.44 lakh new accounts were added, which took the total number of demat accounts to nearly 16.5 crore.

In the years 2023 and 2024, demat accounts opening has grown rapidly. Around 3.18 crore fresh demat accounts have been opened in the eight-month period from January to August this year, which exceeded the total number of accounts added in 2023, which stood at 3.1 crore.

Data from the depositories also showed that since January 2023, as many as 6 crore new Demat accounts have been added, a strong indicator of rising investor interest in the Indian equity markets.

A number of factors seem to be driving the demat boom in India, such as ease in participation due to digitisation of the Know Your Customer (KYC) process, indices reaching new highs, the option of switching brokers digitally, increased investor awareness and interest in new investment opportunities with the surge in IPOs.

Meanwhile, the benchmark index SENSEX has rallied nearly 14% while NIFTY has surged over 15% so far in 2024 (year-to-date).

In August, as many as 10 companies collectively raised nearly ₹17,000 crore via IPOs. In 2024 so far, over 50 companies have raised ₹65,000 crore via the primary market.

Even as investor participation surges to an all-time high and sets new milestones, markets regulator Securities Exchange Board of India (SEBI) has cautioned about the proliferation of unscrupulous promoters in the small and medium enterprises (SMEs) space. Earlier on August 28, the SEBI urged investors not to put their money based on unverified social media posts, tips and rumours.