Retail investment in firms at 11-year high

Stocks have rallied in the September quarter as the unlocking of businesses and uptick in economic activity led to a recovery in the overall economy.

Retail investors boosted their shareholdings in Indian companies to an 11-year high in September with first-time investors continuing to pump in more money into equities.

FILE PHOTO: A cashier checks rupee notes inside a room at a fuel station in Ahmedabad, India.(REUTERS)

Stocks have rallied in the September quarter as the unlocking of businesses and uptick in economic activity led to a recovery in the overall economy.

Shareholding of retail investors in 1,605 listed companies hit an 11-year high of 7.01% in the September quarter, according to Prime Database. This compares with 6.74% in the June quarter and 6.46% in the September quarter last year. In value terms, retail holding in these companies hit ₹10.58 lakh crore at the end of September for the first time compared to ₹9.15 lakh crore at the end of the preceding three months.

Investors opened 3.4 million new demat accounts in the September quarter, according to Sebi data. In September, 1.3 million demat accounts were opened—the highest in the year so far. A demat account is opened by an investor with a depository participant to invest in securities such as stocks and bonds. The securities are held in digital format.

“What is also significant to note is the continuing overwhelming presence of retail investors in mid-cap and smaller companies, which institutional investors typically stay away from. The picture is very different if one looks only at Nifty companies. The retail share in these companies was 6.49% in Q2, declining marginally to 6.09% in case of top 100 companies listed on NSE in Q2,” said Pranav Haldea, managing director, Prime Database Group.

As on September 30, the top 10 companies with the highest retail holding are Reliance Industries, Hindustan Unilever, HDFC Bank, Tata Consultancy Services, L&T, Infosys, Housing Development and Finance Corp., ITC, Asian Paints and Bajaj Finance.