The National Stock Exchange (NSE) is the country’s largest stock exchange by market share, with shares worth more than 1 lakh crore traded in the cash segment every day. There are over 9 crore registered investors on the market, and the total number of customer codes surpassed 17 crore (because one investor can register with many brokerage firms, the number of customer codes increases). Over the previous five years, the total number of investors has more than tripled.
A similar pattern may be observed on the BSE as well. BSE is Asia’s oldest stock exchange, dating back to 1875, and has over 16 crore enrolled investors.
This may appear to present a bright image of investors increasingly flocking to the well-regulated, transparent, and liquid field of stock markets for their hard-earned money, with a gradual but steady shift away from tangible assets such as real estate and gold.
Data show that, while the spike is substantial, not all areas of the country are responsible for it. Some cities, particularly metropolises, have a more lively investing culture and are contributing more in terms of investments or the number of investors.
According to the SEBI’s FY23 annual report, Mumbai and Ahmedabad’s combined share of the NSE’s total turnover increased to 79.2% in the fiscal year, up from 76.7% the previous year. Similarly, the BSE saw the two cities’ share climb to 62.9% in FY23, up from 57.7% in FY22, with Mumbai accounting for 39.7% and Ahmedabad for 23.2%.
Mumbai accounts for the majority of high-volume trading because it is home to most institutional investors, international portfolio investors, insurance firms, financial institutions, banks, and so on. However, metropolitan cities such as Delhi (4.6%), Chennai (5.1%), and Kolkata (0.9%), as well as information technology centres such as Bengaluru (0.7%) and Hyderabad (2.4%), account for just a small portion of the Indian stock market’s cash segment turnover.
In addition, the percentage of towns and cities outside the Top 10 list decreased significantly on the BSE, falling to 30.3% in FY23 from 36% in FY22. Previously, investor awareness workshops concentrated mostly on issues such as creating a demat account, trading shares, and basic stock market principles, among other things, which failed to resonate with people from locations without an equity-investment culture.
Mumbai and Ahmedabad have a good start on the equity culture in India. The BSE, Asia’s oldest stock exchange, was established in 1875 in Mumbai, while the Ahmedabad stock exchange opened in 1894, making it India’s second oldest stock exchange. So these two cities were exposed to equity or stock market culture already in the nineteenth century. They hung on to their lead. Other regions are also catching up, although at a gradual rate. Though other regions are gaining momentum, data clearly demonstrate that states with the highest number of investors continue to dominate the competition in terms of new investors additions. This is significant since the growth is starting off strong. Maharashtra (6.2 million), Uttar Pradesh (5.6 million), Gujarat (3.1 million), Rajasthan (2.6 million), and West Bengal (2.4 million) saw the most new investor additions on the BSE in the last year; all of these states are already on the list of states with the most registered investors.
