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Retail investors burn their fingers all over the country

Small players have been badly hurt by the tanking Sensex, but most talk bravely of tomorrow. KV Lakshmana finds out.

business Updated: Jan 22, 2008 22:17 IST
KV Lakshmana

“We shall overcome” is the theme song being hummed by the small investor across the country, singed by the steepest of market crashes in recent times, barring the odd ones like Shivashankaran from Kerala who can not even afford a Nano instead of a Honda city he had planned as a wedding gift for his daughter.

Shivashankaran lost some Rs 19.5 lakh in a single day in losses, and still counting with the market in a spin, and will need a long time to make good his losses. He also owes Rs 3 lakh to his broker. “ I have promised my daughter a Honda City but now I am not in a position to give her even a Nano,” he curses the black Monday. He has been advised caution till the market stabilises.

But the never say die spirit of the present-day small investor, high on all round prosperity he sees in the economy, is best exemplified by the bold and educated “ Yes, I have lost money but it is only a notional loss. I have invested in companies that are fundamentally strong and I am sure that once the dust settles, these scrips will bounce back,” comment from Srikumar Bandopadyay, a resident of Behala in the Southern fringes of Kolkata.

He has shares in Exide industries, State Bank of India, Dr Reddy’s Laboratories, Ranbaxy Laboratories, NTPC and the like. “I strongly believe in the growth prospects of the country and I am sure it will bounce back again,” this amateur investor with four years experience says reflecting a sound understanding of investing.

So it is not surprising that in Gujarat, the State which arguably populates the most thriving entrepreneurial spirit and shrewd businessmen, they are not unduly perturbed over the long term effects of the blood bath on the Dalal Street. The only debating point was how long the market will take to recover, in three or four days or when Finance Minister P Chidambaram presents union budget in Parliament next month. .

Hema Jadeja is a typical example of the Gujarati Spirit. “My portfolio (of shares) has come down from Rs five lakhs to Rs four lakhs in just two days”, she told Hindustan Times but exuded confidence that she would recover the losses. There are temporary losses in the futures scrips like L&T and others but I am holding on to them as of now, she said with the hope these would rise again to give her handsome profits some time later.

“The investor who sells all his shares in panic of the crash would incur losses”, said Sudeepbhai, a sub-broker, adding that this is the right time to buy at low prices and wait for booking profits when the share market booms again. That’s probably what Gujarat’s business sense is all about.

Nitin Bansal, 30, a middle-level manager in an insurance company in Bangalore, would like to hold onto his investments of Rs 35, 000 in equity of DCM Sriram, Ispat Industries, Power Grid Ltd, Reliance Communication and Reliance Natural Resources Ltd. Last fortnight, his overall profit stood at Rs 11,000. Post the meltdown, it has dipped to a loss of Rs 5000 (spread over the entire portfolio). "I feel bad, but I know it is temporary and that the market will get stabilised next month.”

Syed Nayaz Pasha, 28, assistant finance manager in an iron ore exporting firm, also in Bangalore, who has dabbled in stocks for seven years, finds this slump in the market hurts most. But, I will wait for the market to recover and will not resort to distress sale. Insha allah, the market will recover in a month," he said adding, “in future, I will make investments with more caution.”

In Bhopal, the hope that the next day would be different is what keeps them going. But, said Harish Trivedi, who suffered a huge loss in madcap and smallcap investments, “It will take quite a while to overcome the loss even if the market starts improving from tomorrow.”

Mirza Alam, a day trader in Lucknow never expected the market to crash all of a sudden. The value of his investment in blue chips like RNRL, Reliance Capital, RPL and Reliance Communications has become half, but the saving grace is that “it was my own money invested and not borrowed from the broker to buy shares.”

(With inputs from Rathin Das/Ahmedabad, Ramesh Babu/Thiruvananthapuram, BR Srikanth/Bangalore, Santosh Chowdhury/Lucknow, Swarleen Kaur/ Chandigarh, Rakesh Dixit/Bhopal)