Demat accounts rise 33% in May on positive market sentiments; Zerodha sees marginal dip in clients

In line with the positive market sentiments, demat accounts during May grew 33% over previous month with 2.1 million additions. The new account openings in May were in cue with the average new account additions in FY23.

The total number of demat accounts increased to 118 million in the said month.

In terms of total demat accounts, CDSL continued to gain market share, whereas, on an incremental demat basis, NSDL gained market

share month-on-month (MoM) in May. On a year-on-year (YoY) basis, NSDL lost 210bp/550bp market share in total/incremental demat accounts.

Equity markets rallied in May with benchmark Nifty rising 2.1% MoM as global trends improved and inflation showed signs of easing.

Further, after declining for 10 consecutive months, the number of active users on NSE improved marginally to 31.25 million in the reporting month from 31.16 million in April. It is pertinent to note that the month of May had 22 trading days as against just 17 in April.

Overall average daily trading (ADTO) volume inched up 4% MoM to Rs 253 lakh crore, fueled by continued traction in F&O and a strong recovery in cash ADTO, according to Motilal Oswal.

Overall retail ADTO was flat MoM at Rs 91 trillion as retail F&O ADTO was flat MoM. However, retail cash ADTO recovered strongly by 15% MoM to Rs 25,400 crore.

Currently, the top five discount brokers account for 60% of the overall NSE active clients, a decline from 60% in April 2023.

Zerodha reported a 1.1% MoM decline in its client count to 6.2 million, with a 30 bps decline in market share to 19.9%.

Meanwhile, Angel One reported a 1.2% MoM increase in its client count to 4.3 million, with a 10 bps rise in market share to 13.8%.

Angel One, which relies heavily on income from F&O, recorded an increase of 2.6% MoM in its daily orders. "Given the increase in retail cash volumes, it will be important to monitor ISEC’s expansion in the cash segment," Motilal said.

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