mumbai, April 9 -- After two years of strong expansion, the pace of new demat account additions slowed in FY26, signalling a shift in retail investor behaviour as volatile markets and weaker returns tempered their enthusiasm. Net demat account additions fell to about 32 million in FY26 from a record 41 million added in FY25, according to data collated from the Centre for Monitoring Indian Economy. The total number of demat accounts crossed 225 million. The 22% year-on-year decline in additions of demat accounts-dematerialized or paperless accounts mandated for trading in securities-suggests that the surge in retail participation during the recent bull run is beginning to lose momentum amid a more uncertain global and market environment. The longer-term trend shows how growth is now normalizing after a sharp post-pandemic surge. New accounts had jumped from 14 million in FY21 to 35 million in FY22, marking a 142% rise, the data showed. This was followed by a moderation to 25 million in FY23. The momentum picked up again in FY24 with 37 million new accounts and peaked in FY25, before easing in FY26 as market conditions turned more volatile. "Markets are currently in a consolidation phase. Whenever markets are in a downtrend and sentiment weakens, retail activity tends to decline. This is a cyclical pattern," said Kranthi Bathini, director of equity strategy at WealthMills Securities. "Seasonal investors typically enter when markets are rising, so periods of negative sentiment lead to slower account additions." The moderation is also visible in monthly data. Net additions fell to 2.15 million in March from 2.81 million in February and 3.62 million in January, marking the lowest level of account additions since May 2025. Month-on-month growth slipped below 1% (to 0.97%), the slowest pace since January 2020. "The slowdown appears largely cyclical rather than structural," said Harshal Dasani, business head at INVasset PMS....