The Sensex and Nifty50, two of India’s major stock market indices have been on a consistent uptrend in the last few years. Today, an average morning breakfast conversation in India is highly likely about ‘how many points has Sensex jumped’! This positive market scenario has attracted significant investor interest as a huge number of young people flock towards the stock market.

The majority of this growth is said to be driven by millennials, typically aged between 23 and 40. Today, young people are willing to set aside a significant portion of their income to invest in stocks. With access to smartphones and multiple online investment platforms, it is also easy for anyone to open a Demat account. In this blog, we will discuss in detail the rising popularity of Demat accounts among millennials and how it is changing the country’s investment landscape.

Why are Millennials Choosing Demat Accounts?

If you are part of the millennial generation, you would know how your parents and grandparents preferred to invest in traditional avenues like bank fixed deposits and gold. Today, you have far more opportunities to make the most out of available capital rather than fetching nominal returns from bank FDs. Here are some of the top reasons why more millennials are choosing to open demat accounts:

1. Convenience: You can open a Demat account quickly and easily online. It allows you to keep a track of the stock markets and your portfolio from anywhere at any time.

2. Willingness to Take on Risk: As a younger investor, you might be more comfortable taking calculated risks in the stock market. By exploring avenues like stocks and IPOs you create more potential for your portfolio to fetch higher returns.

3. Potential for Higher Returns: Traditional investments like fixed deposits offer low returns, while the stock market has the potential to provide higher returns over time.

4. Access to IPOs: Demat accounts allow you to participate in Initial Public Offerings (IPOs), where you can potentially benefit from listing gains.

5. Portfolio Management: With a Demat account, you can easily manage your investments, track your portfolio, and make informed decisions with tools and resources provided by platforms like Sharekhan.

6. Access to Online resources: Today, platforms like Sharekhan Knowledge Centre offer innumerable high-end resources like blogs, courses, training sessions, etc. You can access these easily online and enhance your stock market knowledge.

Record Growth in Demat Accounts

The number of Demat accounts in India has been increasing rapidly. By August 2024, over 40 lakh new accounts were added, bringing the total to more than 17 crore, according to NSDL and CDSL. This growth has been largely driven by the increase in IPOs, which are attracting young investors like you.

Millennials are not afraid to take calculated risks for the potential of higher returns. The convenience of Demat accounts, along with easy access to financial knowledge, has made the stock market more attractive to younger investors.

How Millennials Are Influencing the Market

Millennials aren’t just investing in the stock market; they are influencing the course of capital markets. A case in point is how SME (Small and medium enterprises) IPOs are seeing a sudden surge in subscriptions compared to a few years earlier. While this is partly attributable to SEBI’s efforts to make the IPO process smoother for smaller companies, the increasing interest of market participants in these IPOs cannot be ignored. Many recent SME IPOs saw their issues being subscribed multiple times, resulting in large-scale benefits for the company as well as listing gains for investors.

Millennials are also influencing sector-specific growth. Today, sectors that align with the interests of the younger population, such as technology, renewable energy, or e-commerce, are seeing growing demand.

Additionally, people are also opting for passive investment options like Exchange-Traded Funds (ETFs), which provide diversification at a lower cost. ETFs allow you to spread your risk by investing in a basket of stocks, making investing simpler and more accessible.

Conclusion

The rising popularity of Demat accounts among millennials is undoubtedly changing the landscape of India’s financial market. As a millennial investor, you have access to tools, resources, and platforms that make stock market investing easier and more rewarding. The stock market offers you an opportunity to grow your wealth, and with the right information, you can make informed decisions.

If you're looking for more insights on how to start investing or manage your investments, the Sharekhan Knowledge Centre is a great place to start. With expert advice and practical tips, it’s an excellent resource to guide you on your financial journey.