India’s Demat Account Growth Slows In October 2024; New Additions Slide To 35 Lakh; Key Triggers?

India's stock market ecosystem witnessed significant developments in October 2024, with updates on demat account trends, client base shifts, and trading activity dynamics. According to a report by Motilal Oswal Financial Services (MOSL), the total number of Demat accounts in India reached 179 million. However, new account additions dipped, signalling a slowdown in retail participation.

Demat Accounts Growth
Despite achieving a substantial milestone of 179 million accounts, only 3.5 million new accounts were added in October 2024, below the monthly average of 3.9 million year-to-date for FY25. CDSL outperformed its competitor NSDL, maintaining its lead in both the total number of accounts and incremental growth. Meanwhile, NSDL's market share continued to decline, shrinking by 400 basis points (bp) year-on-year (YoY) in total accounts and 210bp YoY in incremental accounts.

Active NSE Clients
Active clients on the National Stock Exchange (NSE) rose by 2.1% month-on-month (MoM) to reach 48.9 million in October 2024. Discount brokers solidified their position, accounting for 64.5% of active clients, up from 61.4% a year earlier.

Among discount brokers, Groww and Angel One were the fastest-growing players:
Groww: Client base expanded by 2.8% MoM to 12.6 million, raising its market share by 20bp to 25.8%.
Angel One: Grew by 2.4% MoM to 7.5 million clients, maintaining a stable 15.4% market share.
Zerodha: Despite a 1.2% MoM increase in its client base to 8.1 million, its market share dipped by 15bp to 16.5%.
Upstox experienced a 1.4% MoM growth to 2.9 million clients, though its market share fell by 5bp to 5.8%.

Traditional Brokers
Traditional brokers, primarily bank-promoted entities, displayed steady growth:
ICICI Securities: Increased its client base by 0.7% MoM to 1.9 million, with a consistent 4% market share.
Kotak Securities: Grew by 2.8% MoM to 1.5 million clients, maintaining a 3% market share.
HDFC Securities: Achieved a 3.2% MoM growth, reaching 1.3 million clients while sustaining a 2.7% market share.

Decline in ADTO Across Segments
India's average daily turnover (ADTO) witnessed a decline of 3.5% MoM in October 2024, totalling ₹519.8 trillion. This drop was primarily driven by:
A 12.4% reduction in cash segment turnover.
A 3.5% decline in F&O turnover.

The BSE recorded a steep 16% MoM drop in ADTO, driven by reduced activity in both cash and F&O volumes. Meanwhile, the NSE bucked the trend with a 1.2% MoM rise, aided by higher options trading volumes.

Market Share Shifts
BSE (Cash Segment): Market share declined to 6.4% in October from 6.6% in September 2024.
Options Turnover (BSE): Fell from 26.8% in September to 23.2% in October 2024.

Mixed Trends in Commodity Trading
Commodity trading volumes displayed divergent trends, with total volumes on MCX falling by 14.6% MoM to Rs 45.3 lakh crore. This drop followed an all-time high of Rs 53.1 lakh crore in September 2024, largely attributed to a 16.8% decline in options futures.

Options ADTO Performance
Declines:
Gold: -48.3% MoM.
Crude Oil: -19.7% MoM.
Natural Gas: -10.8% MoM.
Increases:
Silver: +59.4% MoM.

Futures ADTO Performance
Declines:
Gold: -19.5% MoM.
Crude Oil: -5.9% MoM.
Natural Gas: -16.3% MoM.
Increases:
Silver: +19.6% MoM.

The rise in active clients on the NSE and steady growth among discount brokers reflect strong retail engagement. With fluctuating commodity volumes and declining market shares for traditional exchanges like BSE, market participants remain focused on trends and opportunities.

*Inputs from Mint*