UP beats Maharashtra to be No. 1 in new equity investor sign-ups

Uttar Pradesh (UP), India’s most populous state, has ousted Maharashtra to become the leader in new investor registrations for stock market investments, shows data from National Stock Exchange of India Ltd (NSE), India’s largest stock exchange. The northern state displaced Maharashtra from the top spot for three straight months through April. New investor registrations in UP stood at 126,000 in April, ahead of Maharashtra’s 118,000, followed by Rajasthan, West Bengal, and Madhya Pradesh.

The spread of business programming, promotions, and investor education in Hindi on television (TV) and trading apps, at a time equities as an asset class are gaining popularity among the youth, is the main driver for this trend, officials of India’s leading broking companies said.

“TV programming on markets in Hindi and through trading apps is getting bigger than their English counterparts, which is one of the chief reasons for states such as UP to climb up the ladder in recent times,” said Nithin Kamath, the founder and chief executive of Zerodha, India’s largest stockbroker. “To be sure, one needs to map whether the migration of people out of UP has happened, without updation to Aadhaar card details, like an address.”

Maharashtra has been witnessing a consistent drop in registrations since October 2021, barring a modest increase in the second half of last year, with 118,000 new registrations in April (-22% from the previous month and -43.5% from the previous year), according to NSE research.

The state’s share in total registrations fell to 15.3% over the last 12-month period from 17.4% in the previous 12 months. Among other top 10 states, West Bengal and Tamil Nadu have gained share over the past 12 months at the expense of Maharashtra, Delhi, and Karnataka. Delhi’s rank in total investor registrations deteriorated from No. 4 two years back to No. 10 in April, resulting in its share dropping by 170 basis points to 4.7% in the last 12-month period, the data shows.

Meanwhile, broking firm IIFL Securities is widening its outreach through Hindi content on its eponymous markets app to tap new clients from Hindi-speaking states.

“Our app’s content on investing is being disseminated in both English and Hindi,” said Jyotshna Solanki, head of strategy at IIFL Securities. “This is in line with what other market intermediaries are doing through promotions and social media, which is catching more eyeballs and resulting in more conversions of first-timers in UP than, say, in states such as Maharashtra.”

IIFL Securities said its 6.72 million clients traded on NSE in April.

Zerodha’s Kamath said unlike rivals, his company isn’t doing promotions, but its hugely popular “financial lessons” portal, called Varsity, is being translated into Hindi for the benefit of potential investors in the country’s most populous state.

“Furthermore, there’s also the belief among some people that the market rally has begun in earnest, while others feel that it has peaked out,” Kamath said. “That could be another reason for some states clocking in a higher number of new registrations than others.”

The bellwether Nifty 50 has been trading in a range, or stayed in a time correction, since 19 October 2021, when it made a high of 18,604.45. From there, it fell to 15,678.9 in mid-June 2022 to rise again to 18,887.60 on 1 December. It tanked again to 16,828 on 20 March this year, only to resume its rally and close at 18,716.15 on Tuesday.

“We’ve been in a time correction since October 2021, and it will be interesting to see if the Nifty tests its 1 December high and sustains above that,” said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services.

“Digital trading platforms have made a big contribution to the promotion of financial inclusion, making it possible for Indians to access the stock market effortlessly from anywhere,” said Ravi Kumar, co-founder and CEO of Upstox. “For a new-age platform Upstox, each of these states—Assam, Rajasthan, and Madhya Pradesh—account for 5-8% of our 10 million-plus user base, of which 75% are first-time investors.”

NSE data shows total new investor registrations in FY23 dropped by 31.3% to 13.3 million against 19 million in FY22, translating into a monthly average of 1.1 million investors.

Updated: 14 Jun 2023, 12:06 AM IST