WHILE the Indian consumer has come of age, the story of the Indian investor is still to take off. While monthly subscriber additions for mobiles is around 1.9 crore, the number of new demat accounts opened each month is in the range of 190,000.
That is, the number of new mobile connections that get added each month are 100 times more than the number of new demat accounts that are activated each month. In addition, the total aggregate demat accounts opened till date are to the tune of 1.7 crore accounts. That means, India adds more mobile connections each month than the entire aggregate number of demat accounts, according to a study done by SMC Capitals. For the past 12 months (till December 2009) for which data is available, number of monthly additions of new demat accounts (NSDL and CDSL) stood at 16.40 lakh -a drop of 57 per cent when compared with 30.83 lakh accounts for the 12-month period ending December 2008.
The number of monthly additions of new mobile subscriptions have risen over 70 per cent to 17.78 crore for the 12-month period ending December 2009.
This probably indicates that while India has seen a telecom revolution, the financial services sector is yet to see success of that magnitude. Such lukewarm new additions to the investor base could be the reason why several areas of financial services sector, such as asset management, wealth management, portfolio management and online broking, have not yet seen robust growth. Several private equity investments and joint ventures that have occurred in this space are still spending time near "inflexion points" for the past four to five years and are awaiting the point of take-off.
While an average Indian still feels that the stock market is like a casino, private equity investors, who have invested in this space, are eagerly awaiting for that point when an average Indian changes his mind and joins the investor base. The Indian financial services sector has grown fairly well -however, there was no such Big Bang success that entitles it to be called as revolution.
