More than one million demat accounts have been opened in the names of minors, highlighting the growing participation of children in Nepal’s capital market, largely through parents investing on their behalf.

According to data from the CDSC, 1,003,006 minor demat accounts had been opened as of last week. Parents are increasingly opening accounts for their children, in some cases within months or even days of birth, with the aim of investing in IPOs and building long-term savings.

The trend has been encouraged by Nepal’s IPO allocation system, under which eligible applicants can receive a minimum of 10 shares when demand exceeds supply. Some parents therefore open accounts for multiple family members to increase their chances of receiving IPO shares.

Children below 18 can legally hold bank and demat accounts under the guardianship of their parents. Once they turn 18, they can operate the accounts independently. A demat account is required to hold shares electronically and is also necessary for applying for IPOs and participating in the secondary market.

Nepal currently has around 8.12 million demat accounts in total. However, the number of accounts does not represent the exact number of investors, as individuals can maintain multiple demat accounts. CDSC estimates that around 5–6 million of the accounts may represent unique investors, while many accounts are used primarily for IPO applications or remain without shares.

The rapid growth in demat accounts reflects a significant increase in public participation in Nepal’s stock market. Around 4,200 new demat accounts are being added every day, while the 18–30 age group has the highest number of accounts.

However, market participation has grown faster than the development of the market itself. Experts point to gaps in investor protection, financial literacy, regulation, supervision and the availability of investment instruments.

Nepal’s stock market remains heavily focused on equities, while instruments such as bonds, derivatives and other investment products remain underdeveloped. Although the market has expanded beyond banks, financial institutions and insurance companies, experts argue that sectors such as agriculture, manufacturing and broader industries still have limited representation.

The rise of more than one million minor accounts therefore signals strong interest in investing from an early age, but it also highlights the need for Nepal’s capital market to develop alongside its rapidly expanding investor base.