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Since March 2020, when India faced a Covid-19-induced lockdown for nearly a month, the ownership of retail investors in Indian companies has surged by more than 16% and reached an all-time high of 1,857 in the quarter ended June, according to the data shared by Prime Database.
In fact, their total holding in value terms surged by more than 3x since Covid and hit an all-time high of Rs 21.68 lakh crore in the last quarter.
The rise in the value of their holding has been faster than that of foreign institutional investors over the three-year period. The value of FII holding has risen by two times since Covid-19.
The sharp rally in the market in the last quarter saw the value of retail holding increase by nearly 15% sequentially in the June quarter, data showed.
If one looks at the mutual fund industry data, asset management companies have seen sustained inflows through the systematic investment plan (SIP) route despite the volatility in equities over the last 12-18 months.
The total SIP inflows hit an all-time high of Rs 15,243 crore in July. The SIP assets under management (AUM) as of July end was Rs 8.32 lakh crore, compared to Rs 7.93 lakh crore a month ago.
“In 1998, FPIs had pumped in close to Rs 15,000 crore into Indian markets. But now, the inflows that MFs are seeing through SIPs in a month is equal to the total FPI investment about 3 decades ago,” said Abhishek Banerjee, founder and CEO, Lotusdew Wealth and Investment Advisors. “This large SIP flow makes the market more resilient as it’s not driven by the decisions of a few.”
In terms of sectors, retail holding as a percentage of the total holdings is the highest in financial services, followed by consumer discretionary, capital goods, and fast-moving consumer goods.
Money Chasers
An interesting thing to note is the section that is attracting retail money the most on Dalal Street.
Retail investors are overwhelmingly present in mid-and small-cap stocks, a segment that risk-taking institutional investors typically stay away from.
As of June end, the top 10 companies where retail holding was the highest are Ujaas Energy, Sintex Plastics, Visagar Polytex, Antarctica, Vikas Lifecare, Urja Global, MPS Infotecnics, Ortin Laboratories, Rolta India, Reliance Capital.
The top 10 companies that saw the highest increase in retail holding in a quarter were Kshitij Polyline, Axita Cotton, Tantia Constructions, Tirupati Forge, Vikas Lifecare, Accuracy Shipping, Mirza International, Servotech Power Systems, Zim Laboratories, and Sikko Industries.
Stocks Bought in Q1
To be part of one of the biggest mergers in the corporate history of India, retail investors were active buyers of shares of HDFC Bank and Housing Development Finance Corporation in the June quarter.
The mega-merger that created the world’s seventh most valuable bank, came into effect on July 1.
Retail investors bought HDFC Bank and HDFC shares worth Rs 1,877 crore and Rs 1,541 crore, respectively, in the June quarter, Prime Database data showed.
The value has been calculated by multiplying the difference in their March and June shareholding by the average closing price of the stocks during the quarter.
Retail investors were also seen actively buying into two Adani Group stocks – Adani Total Gas and Adani Transmission.
The stock that saw the highest buying by retail investors during the quarter was Infosys despite the global growth headwinds. They net bought shares worth Rs 4,514 crore.
Stocks Sold in Q1
The six companies that saw heavy selling by retail investors in the last quarter were Reliance Industries, Tata Motors, Bajaj Finance, ICICI Bank, Asian Paints, and Page Industries.
Retail investors sold RIL shares worth Rs 2,255 crore, and Rs 2,900 crore worth of Tata Motors shares in the last quarter.
New-age consumer technology companies such as Zomato, which made a strong comeback in 2023, were at the receiving end of retail investors in the last quarter. These investors sold shares worth Rs 900 crore.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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