Retail investors reduced holdings in 1,051 NSE-listed stocks during the June quarter, even as these stocks gained an average 35.79%. According to data from Prime Database, this outpaced the 24.22% average rise recorded by 1,130 companies where retail ownership increased during the quarter. The data highlights a sharp divergence between retail ownership trends and stock market performance, suggesting investors may have exited some winners too early. However, this does not establish that retail selling caused the subsequent gains - it merely underlines the risk of interpreting a fall in retail ownership as a straightforward negative signal for a stock.
Several major stocks delivered significant gains despite retail investors reducing their exposure. HFCL delivered the biggest gain among the top 10 stocks, surging 213.66% during the quarter despite retail investors reducing their holding. Adani Green Energy rose 84.93%, while Adani Enterprises and Adani Power gained 72.62% and 48.75%, respectively. Retail investors also cut their exposure to Suzlon Energy, Yes Bank and Trent, even as these stocks gained 48.89%, 40.17% and 49.40%, respectively. This trade-off translated into a potential FOMO moment across more than 1,000 stocks during the June quarter.
As of June 30, retail investors held 15.55% of total shares by number across NSE-listed companies, compared with 5.28% for foreign institutional investors and 6.96% for domestic institutional investors. However, retail participation was much lower in the largest companies, with retail ownership standing at 6.75% in Nifty 50 companies and 6.40% among the top 100 NSE-listed companies. The data compares changes in retail shareholding between the March and June quarters with stock price movements during the same period.
Dinshaw Irani, managing director and chief executive officer of Helios India, noted that the June-quarter earnings season had been broadly positive, with positive surprises significantly outnumbering negative ones. As reported by The Economic Times, Irani said the mid and small caps recorded far greater growth in earnings as compared to the large caps, with Nifty SmallCap 250 beating the Nifty Midcap 150, which in turn beat the Nifty 50. Irani attributed the expected divergence to the composition of the two segments, stating that the large caps universe consists of low-growth industries like IT, FMCG, and large banks, while the mid and small cap universe consists of new-age companies. 360one Capital continued to favour a bottom-up, market-cap-agnostic approach focused on domestic capital expenditure, power and transmission, industrials, private banks, defence, electronics manufacturing services and precision engineering.
