The pace of new demat account openings has slowed down in March to a 23-month low. Though the total number of Demat accounts is on a steady rise, data from depositories signal a slowdown in its growth.
Data from the National Securities Depository (NSDL) and Central Depository Services (CDSL) show that 20.4 lakh accounts were opened in March 2025, as against 30.3 lakh new accounts in February 2025, registering three consecutive months of declining new account openings.
Investor Confidence Wavers Amid Market Volatility
The past six months have been tumultuous for India’s equity market, with the headline indices – Sensex and Nifty – correcting over 13 per cent each. The corrections are deeper in broader markets, with Nifty Midcap 100 and Nifty Smallcap 100 falling in the range 18per cent to 22 per cent.
The downturn in Indian equities is led by a mix of domestic and global factors, including the massive ongoing sell-off by foreign institutional investors (FIIs), muted corporate earnings in the third quarter, and a slowing GDP growth rate. Along with these, the ongoing trade tensions triggered by US President Donald Trump's imposition of reciprocal tariffs on major trading partners, including India, added further fuel to the fire.
These tariffs have sparked fears of a worldwide recession. The market was further weighed down by China's announcement of retaliatory tariffs on US goods, raising concerns over a full-blown trade war escalating. This led to a major crash in stock markets globally, including India, on Monday, April 8. Sensex and Nifty – both settled lower by around 3 per cent on the day, witnessing one of their worst single-day crashes in years.
The IPO market, which saw explosive growth over the last two years, is also facing a lull now. This may have also contributed to the lower account openings.
Further, the trading activity has also slowed down over the months. Exchange data showed, that the average daily turnover, which peaked around June 2024, has been continuously declining month-on-month. In June 2024, the average daily turnover on the National Stock Exchange (NSE) was Rs 1,52,907 crore, while in March 2025, it was Rs 98,693 crore, a decline of 35 per cent over the past nine months.
