The rise of market-linked financial wealth

The financial system in India is changing shape, and the clearest sign is the surge in the value of assets held in demat accounts.

The value of securities held in demat accounts has grown fivefold to INR 535 trillion in FY25 from INR 105 trillion in FY19. Measured against GDP, the ratio has risen from 56% to 165%. The total number of demat accounts rose from around 20 million to 192.44 million during the same period.  

This is a clear, measurable sign of financialisation: the pool of market-valued financial assets tracked in demat form has expanded significantly relative to the size of the economy.

Demat custody represents the value of listed shares, bonds, mutual funds and other dematerialised instruments. Its rise relative to GDP shows that: 

• more savings and issuances are flowing through regulated market infrastructure, and 
• the value of these instruments has grown faster than economic output.  

As custody value grows, market-linked instruments make up a larger portion of the financial assets captured in the depository system. Listed markets now influence a wider base of savings, simply because more assets are held in instruments priced on public exchanges. The rise in the custody/GDP ratio shows that these market-valued assets have increased in scale relative to the size of the economy. 

Custody value is tied to market prices. The rising custody value-to-GDP ratio means that a larger portion of measured financial wealth is now linked to how listed securities are priced. As a result, price movements in public markets have a stronger effect on the value of assets held in demat form than they did six years ago. 

Part of the increase in demat custody reflects the expansion of the listed universe. India has seen a busy IPO cycle in recent years, including several newly scaled startups, moving to public markets. When new firms list, their securities enter the depository system at market value, adding to the total stock of dematerialised assets and contributing to the rise in custody relative to GDP. 

The jump in custody value has occurred alongside several observable indicators: 

• growth in demat accounts, 
• more mutual fund units held in demat form, 
• higher levels of equity and debt issuance; and,  
• a steady rise in total market capitalisation. 

Together, these point to a financial system that is handling a larger share of household and institutional assets than before. 

The rise in the demat custody/GDP ratio shows that the formal financial system is expanding faster than the real economy, and that market-linked assets are becoming more central to how wealth is stored and measured. These shifts strengthen the connection between capital markets and the broader economy, and underline the growing importance of market infrastructure in India’s financial landscape. 

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Explore the raw data and calculations behind this structural shift in our detailed Notebook here.