In the financial year 2025, India experienced an unprecedented surge in demat accounts, reaching a record-breaking total of 192.4 million. This growth was driven by the addition of 41.1 million new accounts—marking the highest-ever increase in a single year. On average, approximately 3.42 million accounts were opened each month, setting a new benchmark for annual account creation. Although the total number of accounts surged, the annual growth rate eased slightly from 32.2% in FY23 to 27.1% in FY25 due to the expanded base.
Demat accounts, which allow investors to hold securities like stocks and mutual funds in digital format, are inching closer to the 200-million mark. It is important to note that this figure does not reflect the number of individual investors, as many individuals maintain multiple accounts. The actual number of unique investors is estimated to be around 120 million.
The momentum in account growth has been accelerating since the pandemic, supported by investor-friendly reforms, strong equity performance, and reduced transaction fees. Interestingly, the number of accounts added in just the last few years equals the total that existed before the Covid-19 outbreak.
According to Kotak Institutional Equities, retail investors now have broader access to capital markets, spanning IPOs, equity trading, mutual funds, and even premium instruments like PMS and AIFs. This shift has been enabled by regulatory efforts from SEBI and improved infrastructure from market intermediaries like brokers and registrars.
The collaborative policy environment, focus on investor protection, and efforts to boost market stability have all contributed to growing investor trust. Yet, the primary driver of this rapid retail participation remains the combination of attractive past returns and positive market sentiment going forward.
