The average daily turnover (ADT) in the cash segment of the secondary equity market is on a revival path after the recent fall, with better retail participation even as uncertainty over high valuation and economic growth persist.
The ADT on NSE was up marginally last month at ₹98,740 crore against ₹98,312 crore in September. The same was up 6 per cent compared to ₹93,545 crore in August, according to data sourced from NSE.
However, the ADT in the first seven months of this fiscal was down 19 per cent at ₹1.01 lakh crore against ₹1.24 lakh crore logged in the same period last year.
The number of listed entities on NSE increased by 10 per cent in September to 2,856 against 2,604 in the same period last year on the back of companies tapping the IPO route in a big way.
The ADT in the cash segment on BSE was down at ₹7,662 crore last month against ₹7,743 crore in September. In the first seven months of this fiscal, ADT was down 17 per cent at ₹7,598 crore against ₹9,128 crore logged last year. Traded securities on BSE was up 7 per cent at 6,277 in September against 5,869 in the same period last year.
Abhishek Mishra, Founding Partner at SKG Investment & Advisory said equity markets are showing early signs of a cautious revival even as participation breadth remained solid with both NSDL and CDSL adding 25 lakh new demat accounts taking the total to 20.7 crore in September, up 1.2 per cent over August.
Sustained IPO activity, expanding demat accounts and ₹1 lakh crore plus daily turnover reflect a market that is digesting high valuations rather than disengaging, he said.
Kamraj Singh Negi, Managing Director – Investment Banking, Pantomath Capital said the intermittent upticks in the cash segment turnover indicates improved market sentiment and selective retail re-engagement which correlates closely with visible earnings momentum and IPO opportunities rather than broad speculative trading.
Capital markets continue to deepen both in breadth and value with improvement in quality of listings, he added.
The steady stream of IPOs adds to both vibrancy and depth of the market, but the real strength lies in the sustained growth of India Inc and the maturing investor base supporting it, he said.
Ajit Mishra, SVP – Research, Religare Broking said the recent improvement in market momentum and sentiment indicates early signs of renewed retail participation, though a sustained uptrend will be crucial for a complete revival in trading activity.
Further, the rise in market capitalisation underscores the improving valuations of existing listed entities, highlighting stronger corporate fundamentals and sustained investor confidence in India’s long-term economic prospects, he said.
A strong IPO pipeline, supported by favourable market conditions and robust investor demand, has brought several high-quality companies to the exchanges, Mishra said.