New demat account additions seem to have overcome a tumultuous phase, for now. The incremental additions, which were on a downtrend since September 2022, have witnessed a trend reversal in December 2022. New additions were at 21 lakh in December 2022 against 18 lakh in November. In September 2022, the additions were at 20 lakh, down from 26 lakh in August 2022.

In October and November, 18 lakh demat accounts were opened. Though the trend reversal is a good news for the brokerage industry, the numbers are still a far cry from the 34 lakh recorded in December 2021 and January 2022 and average additions of 29 lakh in FY22.

“Although the additions were higher than in the past three months, the number continued to be below the FY22 average run-rate of 29 lakh,” the latest capital market monthly report of Motilal Oswal Financial Services Ltd (MOFSL) said.

However, brokerages say the new additions are still strong, and after 2 years of phenomenal growth, a fatigue was bound to come. This coupled with overall market growth (Nifty) of just 4 per cent led to stagnation of new demat accounts, said Prakarsh Gagdani CEO at 5paisa.com

“Though we achieved a peak of almost 40 lakh new demat accounts in one month of Q3-2021, our current run-rate of 15-20 lakh monthly demat accounts is far more than what we were before pandemic. So the numbers may be lesser than 2021, but the scale is still high,” he sounded optimistic.

Decline in active users

However, active user clients in the industry as a whole rose 12 per cent year-on-year, but fell 1 per cent month-on-month to 350 lakh. This was the sixth consecutive month of a decline and the intensity of the fall was maintained at 6.8 lakh accounts in December 2022. Many stockbrokers did lose many users due to market downturn since late-2021, Tejas Khoday, CEO and Co-Founder, FYERS, said, adding that that it was also a phase where the economy “was transitioning back to work from office, so the unrealistic growth proved to be transitory”.

Currently, the top-five discount brokers account for 59.3 per cent of overall NSE active clients, slightly up from 59.1 per cent in November 2022, according to the MOFSL report. Except for AngelOne and Groww, other discount brokerages saw a decline in their client count. “We added the highest number of active transacting investors in the industry and we expect to continue the momentum in 2023” Harsh Jain, Co-founder and Chief Operating Officer, Groww, told businessline on the new customer acquisitions the new-age brokerage made in 2022.

Per the MOFSL report, Groww reported a 2 per cent month-on-month increase in its client count to 52 lakh, with a 57-basispoint rise in market share to 14.6 per cent.

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