It is expected to moderate to 7-8 per cent growth in 2021-22 to Rs 29,500-30,500 crore, it added.
In comments that come amid concerns over a disconnect between the surging markets and the contracting economy, the agency said domestic capital markets seem to have “bucked the overall economic outlook and pandemic blues”.
The market traction has been supported by strong FPI investment inflows, optimism related to a recovery after the graded reopening of the economy, and steady retail investor momentum, it said.
Vaccines, lower interest rates and lower yields on bonds also aided it, the rating agency added.
The equity markets reported an aggregate turnover of Rs 4,222 lakh crore in the April-December 2020 period, registering a year-on-year (y-o-y) growth of 66 per cent, it said.
The average daily turnover (ADTO) increased to Rs 22.46 lakh crore in the same period, from Rs 13.89 lakh crore in the comparable period last year, and Rs 14.39 lakh crore in 2019-20, it added.
“Supported by favourable capital markets outlook and strong transactions volumes, the brokerage industry is expected to post a record performance,” its Co-Head (Financial Sector Ratings) Samriddhi Chowdhary said.
Taking a sample of a dozen brokerage firms, the agency said these firms’ revenues grew by a compounded annual growth rate of 17 per cent between 2015-16 and 2019-20.
After posting a subdued performance in 2018-19 with a contraction in revenues as well as profitability, the performance of the brokerage industry stabilised in 2019-20, it said.
The industry showed an uptick in the current fiscal with the sample pool registering an annualised growth of 34 per cent in broking income and 21 per cent in total revenues in the first half of 2020-21, it said.
The report said that anecdotal evidence suggests that equity markets have emerged as an “unlikely beneficiary of the pandemic”, given limited investment opportunities.
The total number of demat accounts increased to 498 lakh as of December 2020, from 467 lakh as of September 2020 and 408 lakh in March 2020. It translates into a net addition of 10.03 lakh accounts per month in the current financial year, more than twice the 4.08 lakh monthly additions in 2019-20.
Large established entities with a strong presence in online broking have increased their market share, it said.
ICRA cited NSE data that shows that the top-20 brokerage houses together accounted for about 84 per cent of overall active client accounts as of December 2020, up from 75 per cent in March 2020.