42 Lakh New Demat Accounts Added in June, Total Crosses ₹16 Crore

In June, new demat account openings surged to a 4 month high, fueled by ongoing foreign investor buying in a bullish Indian market. 

Data from the Central Depository Service and National Securities Depository reveals that over ₹42.4 lakh demat accounts were opened in June, the highest rate since February 2024. This is a significant increase compared to the ₹36 lakh additions in the previous month and the ₹23.6 lakh added a year ago. 

This is the fourth time that new demat additions have surpassed ₹40 lakh, with previous milestones reached in December 2023, January 2024, and February 2024. The total number of demat accounts now exceeds ₹16.2 crore, reflecting a 4.24 percent increase from the previous month and a 34.66 percent rise compared to last year. 

Analysts said the markets are stable, with a newly formed government ensuring confidence in its continuity. This stability encourages investors to flock to equity markets.

As the tax filing season approaches, many individuals are considering diversifying into equities to potentially boost returns and offset high tax liabilities. Additionally, brokers' campaigns promoting financial inclusion are further driving this interest. 

A bullish broader market, delivering strong returns with no corrections in sight, is attracting new investors. Analysts believe there is still significant growth potential for more demat accounts. Furthermore, ongoing IPOs, which are heavily subscribed and frequently list at premiums, are also drawing fresh investors, prompting the opening of new demat accounts. 

Rajesh Palvia, an analyst at Axis Securities, anticipates the Nifty to reach 25,000 around the Budget period and aims for a year-end target of 28,000.

Analysts also note that as long as the markets continue to perform strongly, the rate of new demat account openings is unlikely to slow down. The market has surged from 70,000 to 80,000 since the post-election period, causing individuals to fear missing out on the rally. This fear is driving more people to invest in the markets and open demat accounts. 

Deepak Jasani, analyst at HDFC Securities, mentioned that of the over 40 lakh new additions, not all are entirely new investors; some might be shifting between brokers or opening multiple accounts with different brokers. A small portion could involve duplicate or multiple demat accounts. Reasons for new demat openings include seeking better deals from one broker to another or dissatisfaction with previous brokers.