New demat additions jumped 29% in 2023

The number of dematerialised (demat) account additions in 2023 exceeded 31 million, driven by the rally in the markets, stupendous gains in small and midcaps, and the robust performance of initial public offerings (IPOs).

The number of demat accounts opened with the two depositories – the Central Depository Services (CDSL) and the National Securities Depository (NSDL) — rose 28.7  per cent in the past 12 months, from 108.1 million to touch 139.2 million. About 4.1 million demat accounts were added in December 2023, making it the highest-ever monthly addition.

“The 2023 market gave double-digit returns after a muted 2022. This rally was broad-based. All segments, including microcaps worked. There is a tremendous amount of liquidity in retail, and their ownership of equities is rising,” said Prakarsh Gagdani, former CEO of 5paisa Capital

The benchmark Nifty50 rose 20 per cent in 2023. The Nifty Midcap 100 rose 46.6 per cent and the Nifty Small Cap 100 rose 55.6 per cent.

India’s macroeconomic stability, corporate earnings, and robust inflows from domestic institutional investors and foreign portfolio investors (FPI) helped the Indian markets end with gains. The US Federal Reserve’s dovish pivot and the Bharatiya Janata Party’s win in three out of five key state Assembly elections further boosted the rally.