2013-14: Demat Accounts Grow Slowest in 12 Years at 4%

Demat accounts in 2013-14 (FY14) grew at slowest pace in last 12 fiscals, even as the Sensex clocked its best returns in 4 financial years.

In FY14, the combined number of demat accounts on the 2 depositories - Central Depositories Services (CDSL) and National Securities Depository (NSDL) — stood at 2.18 crore or an increase of 3.9% year on year.

Experts believe the sluggish growth of demat accounts reflects lack of investors’ confidence in the economy.

“Retail investors are not yet upbeat on the economy. The government should launch better schemes to attract retail investors. With the existing set of domestic investors taking their money out of the capital markets, demat accounts are unlikely to grow at any faster pace in the foreseeable future,” said Mr. UR Bhat, MD, Dalton Capital Advisors.

Domestic institutional investors (DIIs) have sold more than $3 billion worth of equities in year to date.

The number of new demat accounts have been growing at a slower pace since 2008-09 (FY 09).  After seeing a jump of more than 35% in 2007-08 (FY08) , new accounts grew by 7% in  2008 -09 (FY09).  In the following years  2009-10 (FY10- 12.86%),  FY11 (10.79%), FY12 (4.95%) and FY13 (5.25%) -  the growth has remained subdued.

Year             Demate A/C increase

2007-08    35%

2008 -09    7%

2009 -10    12.86%

2010 -11   10.79%

2011-12      4.95%

2012-13     5.25%

2013 -14    3.9%

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