Of the 100 most valuable companies in India that have declared their shareholding for the quarter ended June 2020, 45 companies added an aggregate of record 21 lakh retail shareholders during the quarter. Companies across pharmaceuticals, banking and fast-moving consumer goods (FMCG) sectors saw the biggest inflow of retail investors and, thereby, a rise in their shareholding.
While 41 companies in the list of 45 saw an increase in retail investor base, only four witnessed a decline during the quarter.
In absolute numbers, State Bank of India (SBI) added the highest number of retail investors in the list of 45 companies. The state-owned bank added 4.16 lakh retail shareholders to its exiting count of 24.1 lakh and its retail shareholding jumped significantly from 5.72 per cent in March 2020 to 7.09 per cent in June.
Next in line was Hindustan Unilever (HUL), which added 2.19 retail shareholders to its existing list of 4.42 lakh shareholders, taking its retail investor number to 6.62 lakh at the end of the June quarter, with the retail shareholding increasing from 10.87 to 11.16 per cent during the period.
ICICI Bank, Titan and Indian Oil complete the list of top five. The five companies added an aggregate of 11.15 lakh retail investors, or nearly a quarter of their existing retail shareholder, base during the June quarter. In per centage terms, InterGlobe Aviation added almost 80 per cent retail investors to its base in March 2020. The company of IndiGo added 46,648 new retail investors during the quarter, taking the number from 58,877 at the end of March 2020 to 1,05,525 in June, and its retail shareholding rose from 0.79 per cent to 1.19 per cent.
Titan, HUL and Cadila Healthcare added 72, 50 and 40 per cent, respectively to their retail shareholder numbers. Abbott India, Bajaj Finserv and Divi’s Laboratories also added 30, 26 and 25 per cent, respectively to their existing number of retail investors.
Four pharmaceutical companies figured in the list of top ten companies which added maximum retail shareholders in per centage terms.
As healthcare concerns surrounding the spread of COVID-19 topped investor minds, the healthcare index at the BSE emerged as one of the top performers. While the Sensex has risen by 42 per cent since the lows it hit on March 23, the healthcare index jumped over 55 per cent in the same period. The banking index jumped 29 per cent during the same period.
The trend of inflow of retail investors in bluechip companies is in line with the jump in inflow of retail investors into the stock markets. Over the last three months, Central Depository Services Limited (CDSL) added 19.6 lakh investor accounts at an average of 6.5 lakh a month.
By comparison, the average investor addition by CDSL in 2019-20 stood at three lakh a month. Besides the investor account addition, even the share of non-institutional investors in cash segment rose to a decade high of 68 per cent in June 2020.
As the markets fell sharply in February and March and bluechip stocks were available at significant discounts, retail investors rushed into the stock markets.
CJ George, managing director, Geojit Securities said, “A lot of retail investors are buying good quality stocks in small numbers. We have seen many of them buying in single digits or just 1-2 shares, depending upon the price of a share of the company.”
He added that while this kind of retail inflow was seen in 2006-2008 when the market was rising, “we have not seen such a buying pattern in a market scenario which is full of uncertainty.”
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