The Hindu Business Line : Small shareholders flock to large steel companies in Sept quarter

The total number of shareholders in the six main steel manufacturing companies had increased from 24.97 lakh on June 30 this year to 26.52 lakh on September 30 (see table).

During this period the Sensex had declined from 12,961 on June 30 to 9,044.51 on September 30.

According to senior brokers, the increasing interest of small shareholders in the other big steel companies could be to some extent an outcome of the strategy recommended by several market intermediaries to their clients.

“These stocks have become attractive and the figures indicate that retail investors want to re-enter these stocks. Even we are advising our clients to buy into large companies, particularly the Nifty companies, because those are the ones we think will move first,” said the former President of the Delhi Stock Exchange, Mr Vijay Bhushan.

The largest private sector steel manufacturer, Tata Steel, had been the favourite among investors in a falling market. The number of small shareholders (holding nominal share capital of up to Rs 1 lakh) in the company jumped from 6,46,884 to 7,47,047 during the July-September period. The number of domestic corporate bodies holding stake in the company also went up from 6,128 to 7,132 in the same period.

Ispat Industries, that has the largest shareholder base among all domestic steel companies, saw small shareholders number increase from 8,14,932 to 8,41,330 during July-September though a handful of corporate shareholders preferred to exit the company, bringing their number down from 3,561 to 3,542 in the same period.

The only steel company where the trend was opposite turns out to be Essar Steel. The number of retail shareholders in the company has plunged from 4,14,372 to 4,04,885, though corporate interest in the company has increased from 2,768 to 2,830.

This is because Essar Steel was delisted following an open offer by the company and is not traded. The existing shareholders can exit only by selling their shares to the company as the stock has turned illiquid, brokers pointed out.

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