Paytm Money, a subsidiary of IPO-bound Paytm, has 2,08,000 equity trading accounts as of March 31, 2021. This has been disclosed in the draft red herring prospectus (DRHP) that the financial services major One 97 Communications (Paytm) filed with SEBI recently for its proposed ₹ 16,600 crore initial public offering (IPO).
This performance of having over two lakh equity trading accounts may be noteworthy as Paytm Money had started providing stock broking services only in 2020, capital market observers said.
Although the total number of users availing Paytm Money’s stock broking services has increased and continues to grow, it is still less than one per cent of Paytm’s monthly active customer base. On an overall basis, there are over 33 crore users in the country who are availing various payment and other financial services offered by Paytm.
Rise in demat accounts
Post the first wave of Covid-19 and pandemic induced lockdown, there has been a sharp rise in the number of new demat account sign-ups in the country. There has been an increase of 70 lakh new demat accounts in 2020-21, taking the overall number of demat accounts as of end March 2021 to 6.2 crore. The rise in new age digital-only platforms in recent years has only brought in new investors and accelerated the opening of demat accounts, reflecting growing participation in equity markets.
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Several investors in Tier-2 and Tier-3 cities and beyond are now able to access the equity markets directly on the back of technology leap and digital offerings by online broking companies. Also the fact that millennials have taken to equity trading in a big way out of their apps has also helped push this trend, say capital market observers.
As of end March 2020, India had 5.5 crore demat accounts, more than double the level of 2.5 crore accounts in end March 2016.
Paytm Money’s equity investing and trading platform is helping make direct equity investing accessible across India, including the under penetrated segments.
Paytm Money has achieved a combined assets under management (AUM) of ₹ 5,200 crore in mutual funds, gold and stock trading as on March 31,2021, the IPO prospectus showed.
Users have taken to purchasing digital gold from Paytm Gold in a big way going by the number of investors who had used this service. Since the launch of the digital gold service in 2017, as many as 7.4 crore investors have used the Paytm Gold’s digital gold services, according to the IPO prospectus filed with regulator. Many investors had also opted for the systematic gold withdrawal savings plan.