Retail-heavy stocks plummet 10% this month

Stocks with high retail shareholding have underperformed this month. There are nearly 60 companies (in the top 1,000) where retail investors hold 25 per cent or more equity stake. Retail investors are those who hold shares worth less than ~200,000 in a company.

The average decline in these 60 companies is 10 per cent so far this month. By comparison, the Nifty 50 index has gained 0.2 per cent, while the Nifty Smallcap 100 and the Nifty Midcap 100 indices are down 7.1 per cent and 3.4 per cent, respectively.

South Indian Bank, where retail holding is at nearly 51 per cent, is down 8.3 per cent month-to-date (MTD), while Bajaj Hindusthan, with 45.3 per cent retail holding, is down 15 per cent. Delta Corp, Thirumalai Chemicals, Indiabulls Real Estate, and Hindustan Construction — where retail investors hold equity in the range of 39 per cent and 42 per cent — also saw sharp falls this month but have recouped their losses in the past two trading sessions.

Market players said the sharp volatility and selloff in the broader market space has spooked small investors.

“Some mid and small stocks have gone down 30-40 per cent from their peaks. Several investors have seen a huge dent in their portfolio after this fall. So, the confidence with which people used to approach stocks no longer exists,” said Ambareesh Baliga, an independent equity analyst. The average retail investor count in the top 25 smallcaps (in the Amfi list), is about 166,000. Among these, IDFC has the highest count at 616,708, followed by IRB Infra (455,883) and BSE (419,849). All three stocks have come off sharply from their February highs. The equity holding and retail investor count data is as of the December 2023 quarter.