Indians opened 48 lakh new demat accounts between July-Sept as trading apps made stocks accessible

Close to 7 per cent of India’s 130 crore population is active on the stock market, which leaves a vast population that can be drawn to the indices with online investment options. Amidst lockdowns in 2020, more than one crore new dematerialised accounts were opened across the country. This year, almost 50 lakh demat accounts have been opened in the quarter between July and September alone, with stock trading gaining traction among new investors.

Quick and seamless digitised trading

The data comes from Asia’s first depository Central Depository Service (CDS) India, which is also the first to reach seven crore demat accounts by August 2022. Thanks to online trading via smartphone apps, users can open demat accounts in less than 24 hours thanks to the Know Your Customer KYC mechanism, since people only need to submit Aadhar cards for registrations.

Enabling investment beyond borders

Dematerialised accounts are meant to store stocks in electronic form, and apart from facilitating online trading, they also protect shares from thefts and forgery. Other than stocks in India, demat accounts also enable users to invest abroad by buying shares of firms such as Apple and Meta listed on New York stock exchange.

A vast untapped market for apps

Most demat accounts in the country are now being created in Maharashtra which is home to financial capital Mumbai, followed by Gujarat and Uttar Pradesh comes in at the third position. It’s also notable that 80 per cent trading accounts are currently concentrated only in 10 Indian states, which leaves room for digital platforms to reach a wider consumerbase, in a country where 41 per cent people are connected to the internet.

Will youth move from crypto to stocks?

Although stocks are not as popular among the young and trend-driven investor as cryptocurrencies and NFTs, it might gain traction when they look for more stable investment vehicles. Recently Axis My India’s survey revealed that Indian youth are looking for more gold to invest their funds in a safe asset amid inflation. This reflects a tendency among young investors to move towards markets with less volatility.