Unique investor count on NSE crosses 50 million, shows data

Cities beyond the top 50 account for 57% of new registrations

Spurred by the market rally over the past year and the increasing interest in investments in stocks from smaller cities, the country’s investor count has crossed 50 million, the National Stock Exchange (NSE) said on Monday.

“The unique registered investors on the NSE crossed 50-million count on October 25. While the journey from 30 million registered investors to 40 million took about 15 months, the next 10 million investor registrations took less than seven months. The total number of client codes registered with the exchange stands at 88.6 million (clients could register with more than one trading member),” NSE said in a press release.

The unique investor count, however, is 30 per cent lesser than the total dematerialised (demat) accounts in the country. This is because several investors have multiple demat and trading accounts with more than one broker.

At the end of September, the total demat accounts with CDSL and NSDL — the country’s main depositories — stood at 70.2 million. The number of demat accounts have surged 40 per cent, or 20.4 million, this year — many of which are of first-time investors.

The sharp jump in investor accounts has been underpinned by buoyancy in the stock market, ease of account opening, and shift to remote working following the covid-19 pandemic. The perks offered by brokerages, such as fee waivers and gift vouchers, to attract new clients also has led to investors opening multiple accounts.

While an investor can have more than one demat or trading account with different depository participants and trading members, they are linked to a single permanent account number (PAN).

Market players said the number of unique investors dealing purely in equities could be less than 50 million, as NSE registered investors also deal in other products such as gold and bonds. Industry players said between 10-20 per cent of NSE’s unique investor account could be dealing only in MFs and other asset classes.

“The investors can diversify their portfolio on the exchange platform by investing in equity shares or via the exchange-traded fund (ETF) or mutual fund route, government securities through non-competitive bidding platform, corporate bonds, real estate by way of investments in REITs & InvITs, gold through gold ETFs or sovereign gold bonds,” said Vikram Limaye, managing director and chief executive officer, NSE.

However, despite the increase India’s equity market penetration is still less than 4 per cent, assuming a population of 1.4 billion. Limaye said the industry is focused on taking the investor count past the 100 million-mark over the next 3-4 years.

Smaller cities join bandwagon

The NSE said the northern states account for 36 per cent of new investor registrations, followed by western India with 31 per cent. Meanwhile, southern and eastern states account for 20 per cent and 13 per cent of new investor registrations, respectively.

“In the last 18 months, there is a broad-based market expansion across age bands and geographies. A few structural factors like Aadhaar-based onboarding, ease of payments like UPI, and other factors like low interest rates on deposits, buoyant markets, and a flurry of consumer brand IPOs have increased the interest in market participation. I believe this momentum will continue till these factors exist,” Subramanya SV, CEO, Fisdom.

At the state level, Maharashtra accounts for the highest investor addition at 17 per cent, followed by Uttar Pradesh with 10 per cent, and Gujarat with 7 per cent of new investor registrations. The top 10 states accounted for 71 per cent of new registrations.

Interestingly, the growth in investor registrations has largely been driven from non-metro cities, indicating that the interest in stocks is broad-based.

According to the NSE, cities beyond the top 50 accounted for 57 per cent of new investor registrations, while the cities beyond the top 100 have contributed to 43 per cent.