According to the most recent NSE data, the number of active clients at the exchange has decreased by 53 lakhs during the past nine months.
For the ninth consecutive month, March saw a dip in the number of active NSE clients to 3.27 crore, a drop of 53 lakhs from the 3.8 crore investors in June 2022.
The Retail Crowd
During the lockdown phase, working from home was more common, so three more signals indicate retailers aren’t as enthusiastic about trade as they were. As a starting point, retail inflows were at their lowest level in three years in FY23, averaging Rs 49,200 crore compared to Rs 1.65 lakh crore and Rs 68,400 crore in FY 2021-22 and FY 2020-21, according to NSE data.
Second, in March 2023, the average daily turnover of retail investors in the cash market on the BSE and NSE fell by 29% year over year to Rs 23,700 crore. Finally, the rate of opening new demat accounts is decreasing.
- The number of active clients at the exchange has decreased by 53 lakhs.
- March saw a dip in the number of active NSE clients to 3.27 crore.
- The rate of opening new demat accounts is decreasing.
Following the one-way rally seen after the Covid crash, some naïve traders who were dreaming of becoming crorepatis overnight have learned that the business of trading and investing, while appearing straightforward, is not simple.
Retail investors’ direct engagement on Dalal Street has decreased, while mutual fund inflows are booming. The net inflow into equities mutual funds increased to a one-year high of Rs 20,190 crore in March as a result of record-high levels of SIP flow totaling roughly Rs 14,300 crore.
The decline in retail interest, according to Dr. Vijay Mehta, president of the Association of National Exchanges Members of India (ANMI), is part of a cyclical trend and should not raise any concerns.
Depending on the market level and the economic outlook in India and abroad, Indian investors invest across asset classes in a cyclical manner.
