Pandemic, a blessing in disguise for retail investors

A pandemic, by design, is a pang for a growing economy like India, but it has also served as a boon in disguise recently. The government is working hard to realise the dream of 'Atma Nirbhar Bharat' across sectors, and the message has gone well with retail investors of capital market.

Of the new accounts, around 98 per cent comes from the retail investors. The credit for this goes to the pandemic-generated lockdown which compelled people to remain closed within their abodes that spurred retail demand for consumption. Secondly, FPIs continued to invest in the domestic capital market generously. As a result, the Sensex crossed the magical figure of 52,000, whereas Nifty too went up as high as 15,000.

To elaborate it, small investors have been trading their personal accounts in a big way. In fact, 'Do it yourself' investing has gained momentum. January has seen the highest ever new demat accounts being opened since the lockdown in 2020.

Total number of demat accounts at the end of January stands at 5.12 crore. Out of it, CDSL alone has crossed the magical figure of 3 crore demat accounts. CDSL and NSDL put together, the depositories-duo has brought one crore new investors into their fold during the past one year alone. January recorded the highest ever pace of growth in demat accounts: 14 lakh from 13 lakh in December.

To be precise, 'Do it yourself' is the mantra as has been adopted by the retail investors. Interestingly, it is a global phenomenon, what with an absolute blockbuster year being observe on the front in the US too.

The volume of investments made by the retail investors may be low when compared to institutional investors, but their number is always very high and this is where the catch lies.

Investment appetite of retail investors witnessed a remarkable uptick: With seemingly little room left for the Indian benchmarks to grow after the spectacular show, brokerages have started offering global stocks to domestic investors.

As per an ICRA report, the Industry Profitability level is expected to be supported by the growing retail share coupled with an increase in interest income through margin funding. So, brokerages do their best to facilitate easy trading and keep retail investor interest alive in the market. However, investors should be aware of their own risks and margin of safety before putting their hard-earned money where the mouth was. Keep calm and invest prudently.