Active traders on stock exchanges in India hit 1.2 crores in FY 22

Factors like the absence of alternative investment avenues with expected decent returns, simplification of the KYC process, effective use of digital technology and initiative in opening accounts online, enhanced availability of investment information on digital modes and growing awareness amongst the general public seems to have led an increase in investors participation. The V-shaped recovery in the stock market post the outbreak of the pandemic also added to this trend by attracting first-time investors into the stock market. However, the sudden spurt in individual investor participation could have its downside, as trading in the complex product without sufficient information may make them prone to losses and consequently dent investors‘ confidence in the market, as per the report.

Individual investors‘ active participation in the stock exchanges

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Besides, the number of active dematerialised (Demat) accounts in the country jumped 63 per cent in the past year to more than one crore in the financial year 2021-22 (FY22), shows data provided by SEBI annual report.According to the report, the journey of the securities market since the pandemic’s outbreak has been spectacularly marked by an unprecedented spurt in Demat accounts opened at both the depositories – CDSL and NSDL. The number of individual Demat accounts has increased by 1.4 times in NSDL and by 3.2 times in CDSL from 2020 to March 2022.The number of investor accounts registered with Central Depository Services Ltd (CDSL) registered a strong growth of 88.4% (year-on-year) to 630 lakh at the end of March (compared to 334 lakh at the end of the previous year).

Witnessing a similar trend, the number of Demat accounts at the National Depository increased by 23% to 276 lakh at the end of March 202 (compared to 217 lakh in the previous year).