Chennai, Jan 23: Out of 100 attendees of webinars like, “EARN AND LEARN BY TRADING TECHNIQUES,” 25 to 30 attendees apply for opening of (dematerialized) demat accounts with Motilal Oswal, according to Area Manager (Delhi circle), Hardik Vasani.
Conducting the webinar on Thursday, Vasani added his brokerage firm gets 30 attendees per such webinars. In one day, the 33 year old brokerage conducts four such webinars of half an hour duration each. He added such webinars being conducted since last four years have increased the client base by approximately 70 to 80 per cent.
A member of the brokerage firm’s account opening department, Ekta said, “Clients get knowledge of the art of making money through the webinars and they start trading immediately.” “Motilal Oswal currently has a client base of approximately 12 lakhs including corporates and individuals. Out of which, approximately seven to eight lakhs demat accounts are of individual investors,” adds Ekta.
According to editorial consultant at Hindu Business Line, Aarati Krishnan. “Stock market depth in India is pretty limited with only about 3 crore people owning demat accounts, so brokerages conduct webinars to get more people interested. Such awareness programs are often funded by the investor protection funds maintained by the Ministry of Corporate Affairs (MCA), Securities and Exchange Board of India (SEBI) and stock exchanges. Yes, they do help get more people interested in markets. Usually it is not new investors who come in, but existing investors who move from one segment to another.”
Bloomberg student of Asian College of Journalism, Vasist came to know about essentiality of opening of demat account for share trading while he was doing his graduation in financial market. When he became a professional trader with Housing Development Finance Corporation Securities in 2016 the first stock he bought and regrets till date was of Amtek Auto Ltd. He had bought 100 shares of the stock at price of Rs. 24 each and today the price of its stock has fallen to Rs. 2 each. Clearly, inexperience cost him dearly. He says it was one of his colleague’s advice that made him pay the price. He says these webinars are important for people to attend before starting trading as they teach aspirants traders the basics of market.
According to a data released by SEBI in 2018, 348 lakhs demat accounts were active in India as compared to 168 lakhs in 2009. 50% of these demat accounts were opened within the period 2010 to 2015. In 2018, a total of 40 lakhs dematerialized (demat) accounts were opened in the country. This figure was the highest in at least last 10 years.
According to a survey conducted by SEBI in 2015, it was estimated that there are 3.37 crore households which accounts for 2.46 per cent of the population who invest in different financial instrument options available in the country like equities, mutual funds, commodity and bond markets.
According to the findings of the survey, most of the investors had fled the stock market after the onset of the global financial crisis in 2008. But post crisis, slowly consumer confidence and investor expectation regained their pre crisis level along with surge in the indices by 2015.
According to an article published on Feb. 22, 2017 by business news publication, Livemint which was essentially an observation of data released by SEBI, Maharashtra alone accounts for more than one fifth of total individual stock market investors present in the country. Maharashtra along with other four states namely, Gujarat, Tamil Nadu, West Bengal and Uttar Pradesh account for a little less than 60 per cent of total individual stock market investors in India.
According to the SEBI’s 2015 survey, the number of urban household investors who invest directly in equities stood at 143 in Eastern India, 804 in northern India, 157 in southern India and 1837 in western India.
The two stock market indices namely National Index Fifty (NIFTY 50) and the S&P Bombay Stock Exchange Sensitive Index (BSE SENSEX 30) have grown manifold times since inception in 1996 and 1979, respectively. In 2000, in early January, Sensex stood at 5205. 20 years since then, it has come to be of 41,323.81. This accounts for its increase by 693.94 per cent over the span of 20 years despite occurrence of largest global financial crisis in the year 2008.
Out of 137 crore population of India, only 348 lakhs are currently trading in it, as of 2015. Lack of understanding about how to trade can be sighted as one of the reasons why so many people stay away from the market. There are now more than 5000 registered brokerage firms in India. With technology advancement, their rates have become cheaper and these have become easier to access for clients.
According to Nikhil Kamath, co-founder and chief investment officer of brokerage firm Zerodha, “In India, less than 10% of the population has any exposure to the stock markets as compared to developed economies where this number is closer to 90%.” But looking from point of view of India being a developing economy, there is always a headroom for growth. It won’t be wrong to hope that the figure of 3.47 crores is only going to grow from here on.