Indian Equity Market Sees Revival in Daily Turnover Driven by Retail Participation and IPO Activity

The average daily turnover (ADT) in the cash segment of India's secondary equity market is on an upward trend after a recent decline, supported by improved retail participation, even as concerns about high valuations and economic growth persist. The NSE recorded an ADT of ₹98,740 crore last month, a slight increase from ₹98,312 crore in September and 6% higher than ₹93,545 crore in August. However, for the first seven months of the fiscal year, the ADT on NSE was down 19% at ₹1.01 lakh crore compared to ₹1.24 lakh crore in the same period last year. The number of listed entities on the NSE grew by 10% in September to 2,856, driven by significant IPO activity. On the BSE, the cash segment ADT decreased to ₹7,662 crore last month from ₹7,743 crore in September. Year-to-date, BSE's ADT declined 17% to ₹7,598 crore. Experts believe the market is showing early signs of a cautious revival. The opening of approximately 25 lakh new demat accounts by NSDL and CDSL in September, taking the total to 20.7 crore, indicates solid participation breadth. Sustained IPO activity, an expanding demat account base, and daily turnovers exceeding ₹1 lakh crore suggest the market is digesting high valuations. Intermittent upticks in cash segment turnover point to improved market sentiment and selective retail re-engagement, linked to earnings momentum and IPO opportunities. The capital markets are deepening in both breadth and value, with improved quality of listings. A strong IPO pipeline continues to add vibrancy, supported by robust investor demand and favorable market conditions. The rise in market capitalization also reflects improving valuations of listed entities, underpinned by strong corporate fundamentals and investor confidence in India's long-term economic outlook.

Impact This news suggests a positive sentiment returning to the Indian equity markets. Increased turnover and retail participation can lead to higher liquidity and potentially drive stock prices higher, especially for companies tapping the IPO market. While concerns about high valuations remain, the digestion of these valuations by investors indicates underlying confidence in India Inc.'s growth story. This trend can attract more capital into the market, benefiting investors and the overall economy. Rating: 7/10

Heading Difficult Terms: Average Daily Turnover (ADT): The total value of securities traded on an exchange or market in a single day, averaged over a specific period. Secondary Equity Market: Refers to the stock market where investors buy and sell securities that have already been issued by companies (e.g., stocks, bonds) through an initial public offering (IPO). Retail Participation: The involvement of individual investors (non-professional investors) in the stock market. Initial Public Offering (IPO): The process by which a private company becomes public by selling its shares to the public for the first time. Demat Account: An account used to hold shares and other securities in an electronic format. NSDL (National Securities Depository Limited): One of the two depositories in India that holds financial assets like shares and bonds in electronic form. CDSL (Central Depository Services (India) Limited): The other primary depository in India. Market Capitalisation: The total market value of a company's outstanding shares of stock, calculated by multiplying the total number of shares by the current market price of one share. Valuations: The process of determining the current worth of an asset or a company. Corporate Fundamentals: The underlying financial health and business operations of a company, including its revenue, earnings, assets, and liabilities.