Retail participation in the stock market has seen some improvement. The National Stock Exchange (NSE) has attracted 650,000 new participants on its platform during the first six months of the current financial year, the latest data calculated by the exchange.
According to officials of both exchanges, these numbers are based on unique permanent account numbers (PAN) registered with them. PAN number registrations with NSE and BSE suggest 14 million taxpayers out of the 34 million are connected with each exchange.
This is via 1,400-1,500 broking members registered with NSE and BSE each. Effectively, this means at least one in every three taxpayers is using the NSE and BSE platform to take exposure to the equity market, said the NSE official.
The NSE says a majority of these players, who has connected for the first time to NSE, are retail participants hailing from small towns that are beyond the top 50 cities in the country. These estimates are based on the number of PAN identity registered with the exchange.
While it is not necessary that all of these are active traders or investors in the market, the numbers can give an idea of the number of people ready or are taking exposure to the equity market and the exchange through which it is being done.
NSE has 200,000 trading terminals spread across 2,000 towns and cities in India.
"Data shows that retail investors from non-tier cities and small towns are contributing very significantly to the total turnover in the cash market. Of the total cash market turnover, about 47 per cent comes from retail investors, in which 24 per cent turnover comes from towns that are beyond the top 50 cities. Also, about 36 per cent in overall retail participants are from such small towns. This is backed by the people trading with NSE from over 2,000 towns and cities across the country," the NSE official said.
On an average, NSE has seen cash market turnover of between Rs 10,000 and Rs 12,000 crore daily (Rs 100 billion and Rs 120 billion).
Its equity cash and derivatives markets turnover is over Rs 1.25 lakh crore (Rs 1.25 trillion). The BSE's cash market turnover is about Rs 2,000 crore (Rs 20 billion) on an average daily basis and its derivative turnover, partly supported by an incentive scheme, is over Rs 20,000 crore (Rs 200 billion).
This shows that cash market turnover in the equity segment is 10-15
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