Sensex at 75,000: Zerodha's Nithin Kamath notes the rise in demat accounts

Zerodha CEO Nithin Kamath on Wednesday (April 10) said he is surprised to see how the Indian stock markets have performed following the Covid-19 pandemic. This week, BSE Sensex made history as it surpassed the 75,000 mark for the first time. The benchmark index has risen by about 190% from its COVID-19 low on March 24, 2020, with several stocks delivering impressive returns, surging up to 1,375% from their March 24 close.

Taking to X (formerly Twitter), Kamath said Zerodha's customers now collectively hold assets worth Rs 4.5 lakh crore in their demat accounts. "It's unreal how much our markets have expanded post-COVID. @zerodhaonline customers now hold ~ Rs 4.5 lakh crores worth of assets in their demat accounts," Kamath said on Wednesday.

The increasing number of account openings reflects the rising investor interest in financial markets, experts noted. Successful IPOs have also attracted new investors to the market.

In FY 2024, India saw a significant increase in demat accounts, with 3.7 crore new accounts registered, averaging over 30 lakh additions monthly. Both major depositories, CDSL and NSDL, experienced an 11.9% year-on-year surge, bringing the total tally to 15.14 crore from 11.45 crore.

On Tuesday (April 9), the market capitalisation, or the total value of all listed shares, of the BSE-listed firms stood at 401.82 lakh crore. The combined market capitalisation of BSE companies crossed the Rs 400 lakh crore mark to touch Rs 400.86 lakh crore on Monday. It took 9 months for these firms to add Rs 100 lakh crore of market capitalisation. The BSE m-cap had crossed Rs 300 lakh crore in July 2023.

The BSE Sensex had hit the 74,000 mark on March 6 this year. The index first crossed the 70k mark on December 14, 2023.

Launched in January 1986, the BSE Sensex -- initially at an approximate measure of 550 points -- has successfully sustained a remarkable growth trajectory, reaching an unprecedented peak of over 75,000 points in April 2024. Notwithstanding several periods of significant downturns such as the financial crisis in 2008 and the global pandemic that struck in 2020, it has resiliently demonstrated its capacity to withstand turbulent times while preserving its overall upward trend.

In the last 10 years, since PM Narendra Modi-led NDA government came to power, investors' wealth, measured by BSE's market cap, has gone up by five times.

Sensex breached the 75,000 mark and the main catalyst behind the current uptrend is the hope of a stronger than expected Q4 corporate earnings which is fuelling the market momentum over the past one week. The uptick is equity markets is seen despite a strong momentum in gold, crude and metals amid Fed rate cut expectations going ahead, said Prashanth Tapse, Senior VP (Research), Mehta Equities.

"Government policies and reforms have been pivotal in providing a stable environment for market growth. Stimulus measures and a focus on digitalization and infrastructure have attracted significant investments. The rise in retail investor participation, along with sustained interest from foreign institutional investors, underscores the broad-based trust in India's potential," he said.

"Several factors contributed to this market rally. Central banks around the world implemented interest rate cuts, while governments enacted fiscal stimulus packages to bolster their economies during the COVID-19 crisis. This strategy proved effective, leading to a robust economic recovery in India," said Santosh Meena, Head of Research at Swastika Investmart.

"India boasts the fastest-growing economy globally, with a promising future fueled by political stability. We appear to be in the midst of a major bull market, which is likely to persist for the next few years. The Sensex reaching 100,000 seems like a realistic possibility in the near future," Meena added.