Demat accounts soar in J&K, 8 lakh investors take the equity plunge

Srinagar, Apr 12: While investing in the stock market has traditionally not been a widespread practice in Jammu and Kashmir, the Union Territory is now witnessing a steady rise in the number of residents opening demat accounts to trade shares.

A Demat account is required to buy and sell securities on the Indian stock exchanges.

According to the latest figures, as of April 8, 2024, there are a total of 8,06,090 active demat accounts held by investors from Jammu and Kashmir. This represents a significant 50.34% increase over the past one-year period from April 8, 2023 to April 8, 2024, with 2,69,924 new demat accounts opened during this time.

The upward trend shows no signs of slowing down, as the past one month alone saw the addition of 28,875 new demat accounts, reflecting a 3.72% rise in just 30 days.

"We are seeing more and more people, especially the younger population, expressing interest in stock market investing," said an executive of NSE. "Earlier, traditional investing options like real estate and gold were preferred, but now people are realizing the potential of equity markets."

However, according to market experts, the number of investors from J&K is still very low in comparison to other major cities or states.

“Only 8.06 lakh of the anticipated 1.68 crore people participate in the equity investing market, which indicates poor penetration. However, it is positive to note that the number of investors has increased over the previous several years,” they said.

Whole Time Member (WTM) of Securities and Exchange Board of India (SEBI) Ashwani Bhatia last year while delivering a keynote address on ‘Overview of Securities Market’ at J&K Bank’s corporate headquarters gave a detailed overview of the securities market in the country saying, “Markets in India are safe, secure and well-regulated. As the fifth largest economy in the world, the value of our GDP – Rs 310 lakh crore is almost equal to the Market Capitalisation of the companies in the country, which is Rs 300 lakh crore. In addition, if we add the bond market and other products, it is bigger than the GDP of the country. So as the country grows the wealth is being created here.”

To promote financial development in J&K, experts have counselled the administration to extend financial literacy instruction throughout Jammu and Kashmir.

“The assets under management portfolio in J&K is extremely small, at barely Rs 6000 crore,” they said.

This necessitates a significant financial depth throughout J&K.

In India, the number of people using demat accounts has increased significantly over the past few years as a result of increased financial literacy and increased market and investment knowledge.