While demat account openings across the industry have slowed from the frenetic pace seen during the post-pandemic bull run, fresh data from National Securities Depository Ltd. (NSDL) suggests that the battle is increasingly shifting from attracting first-time investors to winning market share.
NSDL's announcement that assets held in custody have crossed Rs 520 lakh crore shows the sheer scale of India's financialisation story. According to the depository, industry-wide incremental demat account additions declined by 21.9% in FY26. Yet, NSDL managed to move in the opposite direction, reporting a 34.1% increase in account growth and adding a record 59.3 lakh gross demat accounts during the year.
Instead of relying solely on a flood of new retail investors, depositories and intermediaries are increasingly competing for a larger slice of an existing and growing investor base.
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NSDL's growth appears to have been driven by both distribution and technology. The depository added 21 new depository participants during FY26 and expanded its digital infrastructure through the implementation of more than 40 APIs aimed at streamlining onboarding and servicing.
The company now services more than 4.5 crore client accounts and has a presence across 99.38% of India's PIN codes, reflecting how capital market participation is spreading beyond metropolitan centres.
The depository has also begun targeting specific investor segments. During the year, it introduced a Women Demat Plan and continued its YUVA initiative for investors below 24 years of age, both offering settlement-fee waivers aimed at lowering barriers to market participation.
This comes as actively managed equity mutual funds recorded net inflows of Rs 22,907.77 crore in May, as per monthly data released by the Association of Mutual Funds in India. The figure was the lowest monthly equity inflow recorded so far in 2026, and marked a sharp pullback of 40.4% from Rs 38,440.20 crore in April.
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