The Hindu Business Line : No rush for demat accounts

Mumbai, Jan. 24 The opportunity of ‘value stock buys’ at the current lows, being recommended by advisors, has not seen any unusual rush for new demat accounts.

Last year-end witnessed growth in the number of demat accounts, which swelled during the beginning of this month propelled by Reliance Power IPO. Although share prices have fallen, compared with two weeks ago, it has failed to enthuse investors.

New applications

“People new to the market are shying away, maybe seeing how their investor friends have fared in the last few days,” said a broker. “Also existing investors are finding it difficult to place buy orders, so why would new investors be so enthusiastic?”

“We do not see any unusual increase in applications for new demat accounts,” said a spokesperson for CDSL. CDSL had 39.92 lakh active accounts as on January 15, 2008, against 35.74 lakh as on December 31, 2007.

National Securities Depositories Ltd had total demat accounts of 87.68 lakh, against a little less than 85 lakh at the end of December 2007.

During the Reliance Power IPO, there were some days when new applications were as much as 1 lakh, he said. This has now settled down to what would work out to the usual 50,000 applications a week.

At NSDL, the number of active accounts grew by 7.25 lakh during the October-December 2007 quarter compared with 5.22 lakh in the immediate previous quarter. At CDSL, the growth was even more dramatic with a near two-fold increase in the number of accounts. The outstanding active accounts grew by 6.9 lakh in October-December 2007 against 3.8 lakh in the preceding quarter.

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