Mirroring the national wave, West Bengal, too, has seen a sharp rise in the number of new demat accounts ever since the beginning of the pandemic. Falling interest rates and drying up of other investment avenues are being cited as the main reasons for this new-found love for stock market investments.
The pandemic-ravaged financial year 2020-21 saw brokerages in India adding an average of 13 lakh new demat accounts every month since April last year, taking the overall retail investor headcount to a record 6.97 crore as of May 31, according to BSE data. In a state-wise breakdown, traditional high investing states like Maharashtra and Gujarat top the list, West Bengal is not far behind at the sixth position. The state has 39.5 lakh retail investors so far.
That is a significant number for a state that has a conventional investing community, largely staying away from stock market investments. The conservative community largely opt for secured forms of investments such as bank deposits and government securities. "Overall we have witnessed growth from multiple states. However, some specific states where the financial market penetration was historically very low, have witnessed aggressive growth," said Vivek Bajaj, MD, StockEdge. "Low-interest rates and reduction of opportunities in other businesses have prompted investors to join the bandwagon," he added.
Most of the new demat accounts come from the younger generation. Even as stocks of IT firms continue to be hugely preferred by retail investors, real estate is a surprising elevator in the market.
"The choice for the investors have been metals, realty and IT because of changes in cycles. Due to recent dollar weakness, metals have done good. Due to demand for residential properties, real estate is doing well, and due to increase in tech penetration, IT stocks are doing superb," said Bajaj.
