NSE Attracts 8 Crore Unique Investors, Surges in Market Participation

NSE Attracts 8 Crore Unique Investors, Surges in Market Participation Image/Mint

VoM News Desk | September 29, 2023 | 12:08 PM IST | Breaking News | Follow on Google News

NSE Attracts 8 Crore Unique Investors, Surges in Market Participation

NSE Attracts 8 Crore Unique Investors, Surges in Market Participation

The National Stock Exchange of India (NSE) has achieved a significant milestone, with over 8 crore unique registered investors in its fold. The total number of client codes registered with the exchange reached 14.9 crore, taking into account that clients can register with multiple trading members.

This landmark achievement means that approximately 5 crore unique households in India, or roughly 17% of households, are directly involved in the Indian stock market through the NSE’s extensive network of trading members, as per the stock exchange’s announcement. Notably, NSE added 1 crore new investors to its platform in the last eight months.

Diverse Geographic Expansion

In terms of geographic distribution, NSE noted that 45% of the new 1 crore unique PAN-based investor registrations originated from beyond the top 100 cities in India. Northern states accounted for 43%, followed by the West with 27%, the South with 17%, and the East with 13% of the last 1 crore new investor registrations.

Key Cities Contributing to the Surge

The list of top contributing cities included Delhi (including the NCR) with a 7% contribution, followed by Mumbai (including Thane/Raigad) at 4.6%, and Pune at 1.7%, according to NSE.

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Attributing Factors: Momentum in Capital Markets and Performance Metrics

NSE attributed this impressive growth in the number of market participants to the momentum observed in the capital markets. Strong performance indicators played a pivotal role, with the Nifty 50 index delivering annualized returns of 22.66% over the last three years, and the Nifty 500 index notching up annualized returns of 24.89% over the same period, as of September 26, 2023. This performance highlighted the long-term and broad-based nature of the market’s strength, extending beyond a few select securities.

Technology-Driven Ease of Onboarding

Sriram Krishnan, Chief Business Development Officer at NSE, noted the role of technology in simplifying investor onboarding and providing self-paced learning modules to enhance knowledge among the masses. These technological advancements have enriched the overall investing experience in financial products through the exchange.

Market Liquidity and Growth Outlook

Market liquidity has seen a boost, especially with the transition to T+1 settlement in the Capital Market Segment, which has made entry and exit more accessible for investors. This positive momentum has led to increased participation and fund mobilization in primary and secondary markets. NSE anticipates that the growing contribution of domestic investors will foster long-term economic growth.

Performance in ETFs, REITs, and More

NSE has witnessed substantial growth in Exchange Traded Funds (ETFs), with daily average turnover increasing nearly 11 times from ₹46 crore in FY14 to ₹605 crore in FY23. Additionally, real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) have observed a daily average turnover of ₹83 crore in the current financial year within the Capital Market Segment. Government bonds listed in the Capital Market Segment of NSE have also seen a daily average turnover of ₹13 crore.

Overall, turnover in the current financial year has experienced growth of approximately 28% YoY in cash equity and 4% YoY in equity derivatives. The equity derivatives to equity cash ratio in FY24 has hovered around 2.5, compared to approximately 3 in FY23, according to the exchange.

VoM News Desk

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