Indian capital markets saw a surge in the number of new investors, with the opening of over 31 lakh demat accounts in August. August marked the highest number of additions in 19 months.
As per the data from the Central Depository Service and National Securities Depository, in July 29.7 lakh demat accounts were opened and a year ago only 21 lakh accounts were formed. The total demat tally crossed 12.66 crore, up 2.51% from a month ago and 25.83% from a year ago.
Also Read: Demat account openings surge to reach 12.35 cr in July, new account openings hit 18-month high
This addition of new demat accounts comes despite a drop in the benchmark indices during August. However, many investors turned their attentions towards mid and small-cap indices, investing in fundamentally strong but undervalued stocks, particularly in sectors experiencing positive business cycle shifts. In August, both mid and small-cap indices reached an all-time highs.
Moneycontrol quoted some analysts and said that growing optimism and confidence in the financial market, coupled with greater awareness of equities as an asset class, have contributed to the rising number of demat accounts. The report also mentioned that a surge in IPO listings, which averaged around 35% to 40% returns, attracted many new participants.