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NSDL and CDSL Demat Accounts


Indian Stock Markets are bearish and that is very much reflected in the number of DMAT Accounts.A look at the number of depository accounts opened with the two depositories of India - National Securities Depository (NSDL), promoted by the National Stock Exchange (NSE) and the BSE promoted Central Depository Services(CDSL) indicates a clear down turn. And what is all the more a clear sign is that around 50% of the accounts in these depositories have zero share accounts in them. This means that there are neither any shares to sell nor any shares that have been bought in around 50% of the total depositories.
NSDL today is stated to have a total of 96 lakh accounts while CDSL has around 53 lakh demat accounts. Of these, around 50% accounts have a nil balance. At CDSL, 17 lakh accounts are stated to have a nil balance. In NSDL around 30 lakh accounts are estimated to have nil balance.
There are two reasonts for this. Firstly, this could mean that given the current bearish trend of the market, has led to people selling off all their holdings and would now resume buying only when the market shows some solid signs of an upturn. This, today-up-and-tomorrow-down scene has kept 50% of the total demat account holders at bay, they prefer to have zero costs when it comes to even maintaining accounts.
The second reason could be that some accounts of these 505, were opened with a specific purpose and once that was served, they just kept a zero balance. When the markets were up and there was kind of frenzy, like the one seen in January 2008, especially prior to Reliance Power IPO opening, there were people from all walks of life scurrying to open demat accounts. Now that the issue is over and done with and we all know what happened after it got listed, maybe all multiple accounts, which had been opened, within the permitted legal purview, have now exited from the market? Remember how scores of housewives, students and retired people; all had opened a demat account for applying for the Reliance Power IPO?
According to the data from National NSDL, the number of, new demat accounts added between June 2007 and January 2008, when the market was nearing its peak at 21,000 levels, was 12.78 lakh. But after the market crashed, since then, from February to June 2008, only 2 lakh new accounts were added. At the CDSL, almost 10 lakh fresh accounts were registered from June 2007 to January 2008. But only 4 lakh accounts have been opened in February-June 2008.
The lack of quality issues in the primary market, the lackluster secondary market, the bad taste left by the IPO of Reliance Power, all together have today affected the investor sentiments and this has been very much reflected in the growing nil demat account balances.
There is no direct remedial measure for this. As they say, there is no cure for moods, sentiments. The accounts will automatically pick up activity once the market improves. Yes, the arrival of a good IPO in market can repose some of the faith back into the system.

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