Demat Accounts in India Surge by 46 Million in 2024, Total Reaches 185.3 Million

India witnessed a remarkable surge in the number of dematerialised (demat) accounts in 2024, with 46 million new accounts added, marking an average monthly addition of 3.8 million. This represents a 33% increase in new account openings compared to 2023, taking the total count to 185.3 million.

Key Drivers of Growth

The growth in demat accounts has been fueled by several factors, including simplified account-opening processes, widespread adoption of smartphones, and attractive market returns. Since the onset of the Covid-19 pandemic, the number of demat accounts in India has more than quadrupled, rising from 39.3 million in 2019 to the current tally.

Impact of Market Trends

The first nine months of 2024 alone saw 36 million accounts added, driven by gains in the secondary market and a record number of initial public offerings (IPOs). However, market turbulence caused by foreign portfolio investor (FPI) selling and earnings disappointments led to a slowdown in new additions during October and November.

Cumulatively, FPIs were net sellers of equities worth Rs 1.2 trillion in these two months, affecting investor sentiment. Despite this, December witnessed a marginal improvement in demat account additions, thanks to a record number of IPOs.

Record IPO Activity in December

In December 2024, 15 companies raised Rs 25,438 crore via IPOs, marking the highest monthly tally for the year and the best December since 1996. Over the year, more than 91 companies raised Rs 1.59 trillion through IPOs. Many investors opened new demat accounts for family members to improve their chances of securing IPO allotments.

Significance of Demat Accounts

Demat accounts, which hold shares and other securities electronically, are a key component of India's financial ecosystem. The steady pace of new additions is seen as a positive sign for market stability.

Expert Insights

“The incremental flows from these new investors will help offset any potential outflows from overseas funds or existing investors and help keep volatility under check. Going forward, the pace of new additions will hinge on market performance,” said a senior executive of a brokerage firm, requesting anonymity.

As the markets continue to evolve, the sustained interest in demat accounts highlights the growing participation of retail investors in India’s financial markets.

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