It’s interesting to refer to the news item appearing in January 2019 that zerodha[i] becomes a broker with the highest number of clients by surpassing the ICICI securities. The table as appeared in various new items if aggregate arrives at a total trading community of 60-70 lakh clients approx. It’s also very common for a client to have multiple accounts. Considering few have 3-4 accounts and few might be having only 1. By calculating the mean of both it seems safe to reduce this figure by another 30% so as to identify people with a single account. So the figure stands close to 50 Lakhs single account clients.
Now we must consider an important factor that many of the accounts must be dormant status as people open them but forget to close. Brokers also keep the accounts alive so as to remain in the number game. It might also be possible that many may not be active traders most of the clients operating with once or twice a year. So the figure of active traders comes down to as low as 25 Lakh people. This figure looks minuscule in a country where the population stands around 150 Cr. So a 0.06% population figure of trading people how many will be voting on an election day can be anybody’s guess.
As per publicly available information around 5000 companies are listed on BSE while only 2000 are actively traded. The average size of people having less than 1 lakh investment in scrip generally stands at 10% of the people with average 35% equity belonging to the promoter. While analyzing this figure of 25 Lakh its better to reduce those who have only 1 lakh average money to play in the market (it might be common names in few scrips though) and many of the people must be either long term investors with 1-2 years horizon which reduces this 25 lakh figure to 10 lakh people having enough money to trade on daily basis.
In a given scenario presuming we don’t discount further this figure of 25 Lakh people as mentioned above and consider all of the active trader tradings with 2000 securities gives an average figure of 1250 people trading with scrip at a given point in time. Analyzing the July 2019 data given on the NSE site provides a figure of 1950 trading scrips with an average trading size of 27K with 2557 Lakh trades in a month of 23 trading days gives an average figure of 0.30 trades per minute per client.
So ironically if the market rises on a given day only 10 lakh people in this country are either happy or sad (depending upon their long or short position). The same is the case when it falls. From the vote bank point of view happiness of these 0.06% people trading 0.30 trades per minute has no significance against the popular vote. Such a minuscule figure pitted against the popular vote bank is no negotiating figure to give any importance. Measures like Long term capital gain (LTCG) or super-rich tax pushing FII’s to take contra positions to show their strength are too small figures to look for. The above figures make the market so vulnerable in the hands of a few with deep pockets.
So the toilet, water, electricity is a better thing to concentrate on rather than the happiness of these small fragments of the population who are not vote-bank at all.
Reference:Times Of India
