India's top brokerages, led by Zerodha, saw a surge in account sign-ups in the wake of stay-home orders that drove a greater number of people to dabble in stocks.

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Data put out by NSE shows strong growth in unique client codes (UCC) that brokers assign to their clients.

Between February and July, the total number of UCCs on NSE jumped from 9.4 million to 12 million. This growth was most sharply led by Zerodha, which saw a nearly 70 percent increase in clients.

Another discount broker, Upxstox (RKSV Securities), was also able to make the most of the share trading boom, with its client base rising 65 percent.

Full service brokers such as ICICI Securities, Angel Broking, HDFC Securities, Kotak Securities and Sharekhan also clocked growth but at a smaller pace. Together, the top seven brokers account for a larger share (58 percent vs 53 percent) of all the accounts in the system.

It has been posited that the trading boom is driven by retail investors, who have come to be called 'Robinhoods', named eponymously after the discount broker in US that has created a similar trading boom in the world's largest economy.

A data point to support the above theory is the faster growth in cash market volumes, where retail traders tend to operate more, versus that of futures and options (F&O).

The below chart shows that turnover in the F&O market (calculated by the value of the premium turnover and not the notional value of the whole contract) has come down to 1.6 times of the cash market in August (based on data available so far), compared to 2.5 times in February.

First Published:Aug 19, 2020 9:27 PM IST