The Hindu Business Line : Retail investors stayed net sellers in July-Sept

Chennai, Nov 4 The market value of shares held by FIIs in S&P CNX 500 companies went up by 25 per cent between July and September, from about Rs 8,00,000 crore to Rs 10,00,000 crore.

The gain for retail investors was less than half this figure, mainly because unlike FIIs they were net sellers. Retail investors purchased shares worth about Rs 12,000 crore (valued at the average of ‘opening’ and ‘closing’ prices) during the same period, while selling shares worth Rs 20,000 crore.

It is partly because large holders were more bearish than small holders that the total value of their holdings went up only 5 per cent, while small holders were able to clock up a respectable 18 per cent. The seeming bearishness of retail investors cannot be explained away by their taking the mutual fund route. These are people who have opted for direct stock market investments.

The more ‘affluent’ among the retail investors have also been much less venturesome than small holders. This is because 75 per cent of purchases by small holders were in just three companies: Bajaj Auto (Rs 2,233 crore), ABB (Rs 2,184 crore) and ICICI Bank (Rs 2,083 crore).

Despite the interest of small holders, total retail holdings in Bajaj Auto went down, not up. Small holders picked up 9 million shares; large holders sold 11 million. However, part of the apparent difference in attitudes towards the stock may be simply because sale of a relatively small number of shares caused migration of a few big investors from the latter to the former category. Eighty per cent of sales by small and large holders alike are related to shares that were, and are, on their way up.

(‘Small holders’ refers to persons holding shares with a face value of less than Rs 1 lakh in any single company.)