Ladakh Leads: Impressive Client Growth in Stock Market
Having an extra income source has become a need of the day. That is why people look for more options to settle their expenses. Investment in the stock market is one such practice that has been widely popular among people over the last few years. Despite being a risky market, people are investing their money in the stock market to get good returns. In this regard, the number of Demat accounts has been frequently rising in recent years showcasing an unprecedented interest in the equity markets. In addition to this, over the last few months, the investors from Tier II and Tier III cities have been opening demat accounts and doing trading, as per Data.
Ladakh has surpassed all other states and union territories in terms of client growth, according to the BSE, with an impressive increase in clientele numbers both annually and every quarter. The reports of a media outlet state that as of Monday, 22 April 2024, Ladakh witnessed a staggering yearly hike of 375.77% in the number of clients. The total client base of BSE for Ladakh is currently positioned at 1,551. After Ladakh, the second position was acquired by Mizoram with a 76.19% hike year-on-year (Y-O-Y) along with a total client base of 11,022. This is followed by Lakshadweep with a 57.81% Y-o-Y hike with a client base of 885.
Maharashtra led the volume record with over 3.2 crore people signing up for BSE. What then motivates this? Analysts believe that a preference for equities markets over other asset classes is the reason behind the rise in demat accounts in recent years. They said that this growth has been facilitated by the increasing financialization of savings, which involves a move away from the traditional preference for investments in physical assets like real estate, gold, and bank fixed deposits and towards financial assets.
Founder and CEO of Grip Invest, Nikhil Aggarwal states that stock markets have become more democratised in recent years with new users from Tier-II and Tier-III cities and different income groups. He said, “These financial assets whether listed stocks or bonds, or even unlisted shares, require a demat account. The strong growth of the stock market combined with growing awareness, ease of investing and almost zero cost of opening a demat account through a fintech platform has been one of the key drivers for the surge in the demat tally across India.”
Frontline stock indices, such as the S&P BSE Sensex and the Nifty 50, saw gains of about 20% apiece in the calendar year 2023 (CY23), but the BSE’s mid- and small-cap indices saw incredible returns of 44% and 48%, respectively. In reverse, profits from traditional asset groups like fixed deposits and precious metals (gold and silver) have reached 20 per cent throughout this time.
In the meantime, the financial year 2024 (FY24) saw the opening of approximately 3.7 crore new demat accounts, the most ever for any fiscal year and a 32% rise over the previous fiscal year. The total number of demat accounts is currently 15.13 crore. It was 11.44 crore as of March 2023.