Why demat account openings surged after the pandemic comes down to a collision of timing and technology: a sharp market crash in March 2020, followed by a rally, lockdowns that left people at home with savings and a phone, zero-commission discount brokers, paperless e-KYC and a run of IPOs, all hitting at once. Accounts went from about 4 crore in March 2020 to well over 18 crore by 2026, though the number of people behind them is far smaller. This is general information, not investment advice.
The Numbers at a Glance
- March 2020: about 4.1 crore demat accounts, according to SBI Securities, which also quotes 4.01 crore elsewhere in the same piece
- FY22: 8.97 crore accounts, up 63% in a year, according to Business Standard
- August 2024: 17.1 crore accounts, according to SBI Securities
- 2026: between about 18 crore and 25 crore depending on the source
- People versus accounts: an estimated 12 crore unique investors, according to Value Research
Before the Surge
Growth had been slow.
- Between 1997 and December 2022, it took 25 years to cross the 11 crore mark, according to SBI Securities
- The pre-pandemic pace was steady but slow, with investors relying on brokerage firms and depository participants for guidance, according to a Scribd research abstract
- SEBI’s chairman Ajay Tyagi said accounts stood at 3.6 crore in March 2019, according to Business Standard
The Pandemic Trigger
The crisis itself changed behaviour.
- The experience of the pandemic played a key role, according to SBI Securities
- With lockdowns in place and savings growing, millions turned to the markets after the March 2020 crash, and within 18 months of that correction accounts tripled, according to Outlook Business
- Since the lockdowns and work-from-home culture began, millions of young people entered the market as first-time investors, according to Tyagi, as reported by Business Standard
The Rally That Rewarded Newcomers
Early entrants made money.
- Benchmarks soared around 150% from the coronavirus-triggered crash in March 2020 to November 2021, according to Tyagi
- Accounts doubled from 3.6 crore in March 2019 to 7.7 crore in November 2021, according to the same report
- A strong rally persuades others to join, a pattern visible in every market boom, though these sources don’t test it
Zero-Commission Brokers
Costs fell to near nothing.
- The rise of discount brokers such as Zerodha and Upstox made it easy to invest through e-KYC, zero brokerage and investment portals at your fingertips, according to Ritika Chhabra of Prabhudas Lilladher, as quoted by Business Standard
- Zero-commission trading and clean mobile interfaces lowered the bar for entry, according to Outlook Business
- The growth of the CDSL depository, where most discount brokers sit, shows in the numbers: CDSL had 6.3 crore accounts by March 2022 against NSDL’s 2.67 crore, according to Business Standard
Paperless Onboarding
The paperwork disappeared.
- Aadhaar-based e-KYC, video verification and digital signatures mean an account can often be opened within a day, compared with the multi-day process of a decade ago, according to Anand Rathi
- NSDL’s and CDSL’s simplified onboarding and the Digital India campaign ensured small towns and rural areas weren’t left behind, according to Outlook Business
Phones and Data
Access became cheap.
- After the revolution made by Jio in the telecom sector, internet usage and subscribers increased tremendously, according to Choice India
- Wider smartphone and internet access is one of the main contributing factors, according to Anand Rathi
- A 2025 research abstract credits discount brokers, simplified KYC and increased smartphone penetration
The IPO Magnet
Many accounts were opened for one purpose.
- A SEBI study found that a significant number of investors open demat accounts primarily to participate in IPOs, according to Value Research
- Almost half of the demat accounts that applied for IPOs from April 2021 to December 2023 were opened in the post-pandemic period, according to the same source
- That means a chunk of the headline growth reflects people chasing listing gains, not long-term investing
Taxes and Alternatives
The tax structure nudged people toward equities.
- SBI Securities argues that peak taxation on bonds and concessional taxes on long-term and short-term capital gains on equities triggered a surge in equity trading and demat accounts
- Falling fixed-deposit returns and a search for better savings returns are commonly cited too, but the sources I found don’t give the figures
- Choice India notes that Indians still rely on traditional options like bank deposits and provident funds, even as demat numbers jump
The Influencer Effect
Social media shaped interest.
- Financial influencers on YouTube, Instagram and Facebook boosted financial literacy and interest, according to Choice India
- Almost 75% of the new investors opened by top brokerages in that period were under 30, according to Tyagi
- The same channels also amplified hype, which is a caution rather than a reason to invest
Younger Investors and Mobile Habits
Demographics mattered.
- Young people entered through apps, not branches, according to the Scribd abstract on app-based platforms and hybrid investing
- App design that feels like a payments app made the first trade feel like an everyday action
Beyond Equity
Other assets rode the same wave.
- Crypto exposure among retail investors grew from 11% in 2020 to 17% in 2023, according to WazirX data cited by Outlook Business
- Record-breaking SIP inflows and a rise in direct equity and derivatives trading accompanied the demat boom, according to the same source
Accounts Versus Investors
The headline number overstates participation.
- India crossed 207 million demat accounts in 2025, but the estimated number of unique investors is about 120 million, according to Value Research
- Multiple accounts per person are common, for IPO allotments, different brokers and family members, according to the same source
- NSE’s own count of registered unique investors was 15.1 crore by mid-2024, according to a JETIR paper, which is a different measure again
Where the Count Stands in 2026
The latest figures don’t agree.
- Anand Rathi, citing SEBI’s monthly bulletin, says total accounts stood at 25.7 crore at the end of June 2026, with 4.6 crore at NSDL and 18.6 crore at CDSL, which sum to about 23.2 crore, so one of its numbers is off
- Choice India lists 18.2 crore accounts till April 2026 and 4.51 crore “active” accounts as of 31 May 2026
- WhalesBook reports NSDL at 23 crore, which conflicts with other sources that put NSDL at around 4.5 crore
- Treat the 2026 total as somewhere between 18 and 26 crore until you check SEBI’s bulletin
What the Surge Changed
The market’s character shifted.
- Retail investors are no longer on the sidelines and are part of narrative building, according to Outlook Business
- Participation reached smaller towns, though many accounts are dormant or used only for an IPO
- Today’s retail investor is not the same as the one who first entered during the post-pandemic boom, according to the same source
What It Didn’t Fix
Penetration remains low.
- In FY22, the number of customers with PAN cards was close to 500 million, against close to 90 million demat accounts, according to Business Standard
- Many households still keep savings in bank deposits, gold and property, as I covered in other pieces in this series
Risks Hidden in the Rush
A boom brings problems.
- Newcomers who arrived in a rally may not have faced a long downturn
- Active trading, particularly in derivatives, has caused heavy losses for many retail traders, though these sources don’t quantify it
- Opening several accounts for IPO allotment adds paperwork and nomination problems later
A Sensible Reading
The surge is real, but nuanced.
- Part of it reflects real financialisation of savings, according to Anand Rathi, which is a durable shift
- Part reflects a market cycle and IPO enthusiasm, which can fade
- The honest metric is unique, active investors, not total accounts
Where the Sources Disagree
Several numbers don’t line up.
- March 2020 account counts, 4.01 or 4.1 crore, and one source’s claim of 5 crore at NSDL alone
- The 2026 total, from 18 to 26 crore
- The share of accounts that are active, which sources measure differently
- Many are broker and research-blog pages, so check the depositories’ own data and SEBI’s bulletin
FAQs
Q1. Why did demat account openings surge after the pandemic?
Lockdowns, a market crash followed by a rally, zero-commission brokers, paperless e-KYC, cheap smartphones and an IPO boom all arrived together.
Q2. How many demat accounts were there before and after?
About 4.1 crore in March 2020, 8.97 crore by March 2022, and between about 18 and 25 crore in 2026 depending on the source.
Q3. Are there really that many investors?
No. Value Research estimates about 12 crore unique investors behind 20.7 crore accounts, because many people hold several accounts.
Q4. Did IPOs drive account openings?
Partly. A SEBI study found many investors open accounts mainly for IPOs, with almost half of IPO-applying accounts opened after the pandemic.
Q5. Is the growth likely to continue?
Sources expect further growth as digital access spreads, but I found no reliable forecast, and market cycles can slow openings.
