New demat accounts touched 10-year high in 2018 at 4 mn: Report

Chennai: The number of dematerialised (demat) accounts opened last year reached a 10-year high at four million, a report said, quoting Securities and Exchange Board of India (SEBI) data.

The total number of demat accounts rose to 34.8 million in 2018 from 30.8 million in the previous year, marking a 13 per cent increase. This indicates a shift in saving patterns from traditional instruments such as gold, real estate and bank deposits to alternatives such as equity and stocks, the report said.

A demat account is opened by an investor with a depository participant to invest in securities such as stocks and bonds. The securities are held in electronic format, making it easier for users to trade shares.

According to the report, demonetisation of two high-value currencies in November 2016 pushed households to invest in stock markets.

The enthusiasm of retail investors kept pace even after a muted 5.91 per cent return in 2018. A total of 24 initial public offerings (IPOs) hit the market, raising a total of Rs 30,959.07 crore compared to Rs 67,147.44 crore garnered by 36 IPOs in the previous year, said the report from Mint.

Retail investors also showed an increase in interest in mutual funds and systematic investment plans (SIPs).

There are 80.3 million mutual fund folios or accounts as of December 2018, of which 99.5 per cent is accounted for by individual investors, according to Association of Mutual Funds of India (AMFI).

Individual investors held Rs 12.91 trillion in mutual funds as of December 2018, a year-on-year increase of 13 per cent.

Overall, 75.3 million accounts belonged to retail investors, 4.54 million high to net worth individual accounts and 4.38 lakh accounts were held by institutional investors.

NT Bureau