The average Indian investor considers dabbling in stock markets akin to gambling, says a study.
According to a study by brokerage firm SMC Capital, "An average Indian is still shying away to wear the hat of investor. An average Indian still feels that the stock market is like a casino."
The study said while India adds 1.9 crore (19 million) new mobile phones each month, the number of new demat accounts comes to only 1,90,000.
The lukewarm response to demat accounts "shows that while the story of Indian as a consumer has opened up, the story of India as an investor is still under wraps," Jagannadham Thunuguntla, SMC Capitals equity head, said.
Till date, the country has only 1.7 crore (17 million) demat accounts, which means that the country adds up more mobile connections each month than the entire aggregate number of demat accounts, he said.
While the current underpenetration of direct investor base in India is a definite case of potential in the long term, this statistics may also indicate that an average Indian is yet to get convinced about the reliability and dependability of Indian capital markets, the study said.
It further added that the tepid investor response could be the reason why several areas of financial services such as asset management, wealth management, portfolio management, and online broking are yet to taste success in the country, Thunuguntla said.
Several private equity investments and joint ventures in this space are still spending time near 'inflexion points' for the past 4 to 5 years, and are awaiting the point of take-off, he said.
"The 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," Thunuguntla added.
Asked whether the current row between regulators Securities and Exchange Board of India and Insurance Regulatory Development Authority will add to further uncertainty in the minds of retail investors, he said the dispute between regulators do add to uncertainty.
However, the row is not likely to have any impact on the number of demat accounts, he added.
