India’s demat boom hits a trading slowdown as retail investors step away

India's active demat client share fell to 19.1% of 23.2 crore accounts in Q1 FY27, down from 26.32% in FY24, as retail participation cooled amid weaker returns, Sebi derivatives curbs, and geopolitical tensions. Sebi's tighter derivatives rules have cut active options traders from 50 lakh to 30 lakh, while its study showed 8.7 million of 9.6 million individual derivatives traders lost a combined Rs 1.05 trillion in FY25. Brokerages described the trend as normalisation, expecting a rebound but not a return to earlier derivatives trading highs.