How active are domestic investors in India’s stock market?

Three out of four demat accounts — which are nothing but digital storage vaults for shares — are inactive, analysis by big data and stock market tracking firm MarketMojo has revealed. India has nearly four crore demat accounts, of which only 0.95 crore are active, it says.

Per SEBI guidelines, a demat account that hasn’t been operated for a year is considered to be inactive.

India has nearly 4 crore demat accounts with two depository participants — Central Depository Services Ltd (CDSL) and National Services and Depository Ltd (NSDL). CDSL holds 1.97 crore demat accounts while NSDL holds 1.96 crore.

Some of the leading online brokers have a ratio of as high as 70 per cent inactive investors, the data show.

Key deterrents

Investors are inactive mainly due to three main reasons, says Market Mojo. One is heavy equity market losses and bitter experience in the past. Two, a busy schedule often leaves them with no time to look at their portfolios. Three, many aren’t happy with the present broker and aren’t sure where to look for trustworthy and reliable advice.