Rise in retail participation trend has continued even during July to September. Data suggests that nearly 5.7 million new demat accounts were opened in H1FY21, registering a growth of 14% in H1 over March-20.

Of these new accounts, over 3.4 million were opened during Q2. Strong addition reflects the growing confidence of retail investors in stock markets.

Of the 3.4 million accounts added in Q2, CDSL added ~3 million demat accounts. The influx of customers has particularly been driven by young first-time investors entering the stock markets.

Millennials today form a large part of India’s workforce. It is expected that they will dominate the workforce in years to come. They have a higher risk appetite and ability to trade through volatile markets. This can be partly seen from increased retail participation over the last six months when markets corrected sharply in Q1FY21 and bounced back in Q2FY21.

Zerodha has been adding nearly 6 lakh accounts from July to September. Clients aged between 20-30 years old constitute almost 69% of their customer base while contribution was around 50- 55% before Covid era. Almost 64% of the customers of the same age group prefer to invest in the equities.

Nithin Kamath, Founder & CEO at Zerodha, in his interaction with ET NOW further added that 60% of their customers are first-time investors in stock markets & mutual funds. He further added that broker with better platform, product & initiatives will gain a better market share.

Vinay Agrawal, CEO of Angel Broking, mentioned that they are seeing an influx of customers from tier 2 and 3 cities and bulk of them are from young age group and first-time investors.

The data point of NSE, highlights that ~63% of retail cash turnover comes from cities beyond Tier 1. In terms of individual investors traded, ~65% of investors traded in the cash market segment come from cities beyond Tier 1. Having said that, demat penetration continues to remain very low at sub 4% in the country, leaving enough room for growth.