The ongoing surge in the stock market has pushed the shareholders' wealth past Rs 50,00,000 crore mark — in the process bringing in over one lakh new investors on-board in just one month.
A total of about 1.2 lakh new stock market investors opened their demat accounts, which is necessary to trade in equities, during the month of May, according to data available with the two depositories, National Securities Depository Ltd (NSDL) and Central Depository Services Ltd (CDSL).
This has increased the total number of demat accounts in the country to over 1.5 crore.
The market experts believe that the inflow of a large number of new investors into the market could be attributed the sharp surge in the recent months as well as expectations for revival of the IPO market with some fundamentally-sound public issues by the government-run companies.
The total investor wealth, measured in terms of cumulative market capitalisation of all the listed companies, has soared to about Rs 51,00,000 crore. This represents a gain of about Rs 23,00,000 crore from the level seen in later October last year, although it is still about Rs 20,00,000 crore below the peak seen in January 2008.
With the benchmark Sensex hitting its record high of 21,206.77 points on January 10, 2008, the total investor wealth had risen to a high of about Rs 72,00,000 crore at that time.
However, a sharp meltdown thereafter pulled the Sensex to below 8,000-mark in late October 2008.
Since then, the Sensex has nearly doubled and has regained 15,000-point mark. Out of the total gain of about 7,500 points in the benchmark Sensex since its 52-week low of 7,697.39 points on October 27, 2008, nearly half the gain has materialised in the past one month alone.
Coinciding with the rally in the stock market, which in turn was partly fuelled by the new government promising speedier economic reform process and also disinvestment in some PSUs through IPOs, the total number of demat accounts in the country swelled by over one lakh over the last month.
"The recovery of the secondary markets would have encouraged many investors who were waiting on the sidelines during 2008 market fall. Also, the upcoming IPOs can also be another reason," SMC Capitals equity head Jagannadham Thunuguntla said.
Expressing similar views, Bonanza Portfolio's assistant vice president (equity research), Avinash Gupta said that the recent rally in the market and election results have improved the sentiment of the investors.
As per the CDSL figures, the total demat accounts increased to 56.19 lakh at the end of May from 55.64 at the end of April.
Similarly with NSDL, such accounts increased to 97.64 lakh at the end of the last month from 97.15 lakh at the end of April.
During the month, the Sensex climbed more than 28 percent in its strongest monthly performance in about 17 years.
