The coinciding increase in demat accounts and companies listing in the stock market may be good for promoters , but no so much for the retail investor, according to an analysis.
The growth in demat accounts and the growth of IPO issues coincide with each other in India and this signals a development in the Indian retail investor, according to the How India Invest Reports 2025 by Groww and Bain and Company.
“Dematerialized accounts grew nearly five times over the last five years, because of a post-pandemic boom in IPOs,” according to the report.
This is only expected to increase and can even give an impetus to 1000 companies listing in the next two fiscal years, the authors wrote. Average retail applications jumped from just over 400 in fiscal 2020 to over 200,000 in FY24, per issue, the report found. Moreover , on an average the oversubscription from the retail investor was 30 times in fiscal 2024, as against 7 times in fiscal 2023 and just 4 times in fiscal 2022.
While the data establishes a retail investor enthusiasm, data on IPO structure suggest that most of the money went to promoters of the companies that listed in the market. About 63% of the issue size between January and November 2025 (₹1.5 Lakh crore) were offer for sale, based on calculations using data from Prime Database. This share was 60% in calendar year 2024 and 58% the year before.
IPOs can consist of fresh issue where new money flows into the company and used for various purposes ranging from funding the companies new capital expenditure or repaying its loans, or offer for sale where the owners and early investors of the company take it home. The larger share of the latter in IPOs show that there is effectively a transfer of capital from exuberant retail investor to a value-seeking promoter.
Industry experts feel that first off, breadth and depth of the market needs to increase.” It (increase in use of proceeds for capex) will come once you get more and more people coming to the market,” said Sid Swaminathan, MD and CEO of JioBlackrock Asset Management Company.
Published – December 09, 2025 08:06 pm IST
