• The Indian stock market saw a record 42,76,207 new investors in November, continuing a trend observed throughout the year.
• The total number of registered investors stood at 21.02 crore as of December 23, with Maharashtra leading in account numbers.
• Demographic changes show an increase in women investors, with one in four new investors being a woman.
• The surge in new investors and growth in the stock market is driven by soaring equity markets, technological advancements, and a shift in savings patterns towards financialisation.

The Indian stock market has been witnessing an unprecedented surge in new investors, with a record 42,76,207 individuals joining in November alone, according to data released by the National Stock Exchange (NSE). This surge in participation is not a sudden phenomenon but a continuation of a trend observed throughout the year. Between July and September, over 1.6 crore people joined the stock market, riding the wave of soaring equity markets that hit record highs.

The benchmark indices, Nifty and Sensex, reached all-time highs of 26,277.35 and 85,978.25 respectively this year, reflecting the bullish sentiment in the market. As of December 23, the total number of registered investors stood at a staggering 21.02 crore, a testament to the growing interest in the stock market among the Indian populace.

The state-wise distribution of these accounts reveals that Maharashtra leads the pack with over 3.7 crore accounts. Uttar Pradesh follows with 2.28 crore accounts, Gujarat with 1.87 crore, and Rajasthan and West Bengal each with over 1.2 crore accounts. This geographical spread of investors indicates the widespread acceptance of the stock market as a viable investment avenue across the country.

Demographic Shifts and the Rise of Women Investors

In October, the total number of client accounts at the exchange surpassed the 20 crore mark for the first time, up from 16.9 crore just eight months prior. The unique registered investor base, identified by unique PAN numbers, stood at 10.5 crore in October.

The SBI Research report sheds light on the demographic changes in the investor base. The country has been witnessing the opening of at least 30 million new demat accounts every year since 2021. Interestingly, nearly one in four of these new investors is a woman, indicating an increasing prevalence of using the capital market as a channel of financialisation of savings among women.

The total number of demat accounts in the country crossed the 150 million mark in FY24, a significant increase from a mere 22 million in FY14. Of these, 92 million are unique investors on the NSE. This year, the number of new demat accounts may cross the 40 million mark, according to Dr Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI.

Mutual Funds and the Financialisation of Savings

The report also highlights the increasing popularity of mutual funds as a preferred instrument for financialisation of savings. The number of new Systematic Investment Plans (SIPs) registered has increased fourfold since FY18 to 4.8 crore, leading to a total SIP contribution of around Rs 2 lakh crore.

The influx of relatively younger investors in the markets over the last few years, driven by technological advancements, lower trading costs, and increased access to information, has been a significant factor in this growth. The report suggests that a 1 per cent rise in market capitalisation leads to a 0.06 per cent rise in GDP growth rate, underlining the critical role of the stock market in the country's economic growth.

This surge in new investors and the consequent growth in the stock market is reminiscent of the dot-com boom of the late 1990s and early 2000s when the advent of the internet led to a similar influx of new investors. However, unlike the dot-com bubble that eventually burst, the current growth in the Indian stock market appears to be more sustainable, driven by a broader base of investors and a more diverse range of investment options.