In times when foreign investors are taking calculative bets on India, the faith of retail bulls remains unabated, as they increased their holding in more than 300 stocks for three straight quarters.

Their consistent faith seems to have paid off too, because atleast 100 of the 300 stocks have given multibagger returns so far in the current financial year.

ETMarkets screened through the shareholding of retail investors with investments of upto Rs 2 lakh in the last three quarters. The screener shortlisted about 305 companies in which retail investors have raised stake for three quarters in a row.

Interestingly, several public sector companies have found them in this list and these stocks have more than doubled retail investors’ money in the last 10 months.

Indian Railway Finance Corporation, Ircon International, Cochin Shipyard, Mazagon Dock Shipbuilders, Rites, Hindustan Aeronautics, Bank of Maharashtra, Shipping Corporation of India, India Tourism Development Corporation, Dredging Corporation, Indian Overseas Bank were the PSUs that saw retail holding increasing for three quarters in a row.

In Ircon International, retail investors’ holding has gone upto 21.92% at the end of December quarter, from 14% at the end of March 2023, data by Ace Equity showed. In IRFC, retail individuals have taken their cumulative holding to 8.58% at the end of December, compared to 6.69% in March last year. India Tourism Development Corporation, which rose to fame in Dalal Street as part of the Ayodhya Ram mandir theme, has been part of the retail investors’ portfolio in the last three quarters.

Not only ITDC, retail investors bet heavily on Thomas Cook India as well, with their holding surging to 14.05% at the end of December quarter, from 10.53% in the September quarter. This stock has given handsome returns of 196% so far in the current financial year.

Among the private sector pack, companies that are into renewable energy and related industry found favour among retail investors.

In Inox Wind Energy, their cumulative holding has gone up to 10.91% from 8.4% in three quarters. Similarly, in Waree Renewable Technologies, they raised their stake to 13.83% in the December quarter from 11.6% in March last year.

Several companies in the infrastructure space also saw increased buying by retail investors, as they were betting on the government’s increased thrust to build a better India and thrive investments.

In multibagger Jupiter Wagons, retail holding nearly doubled in three quarters to 7.50%, while in Patel Engineering, which has given 377% returns in FY24, saw retail holding surge by a staggering 750 basis points to 29.45%.

In Swan Energy, a stock that has given more than 200% returns, retail holding has surged by over three times in three quarters.

While retail investors were big buyers in several stocks, they were also smart in booking profits in some of the big names ahead of the bear attack in the market last month.

In the December quarter, retail investors sold stocks worth over Rs 12,000 crore as they booked partial profits after the strong rally.

Read| Retail investors sold stocks worth Rs 12,000 crore in Q3. HDFC Bank among top 10 sells – The Economic Times

What Next?

Barring January, the preceding nine months was quite rewarding for investors as they managed to find many multibaggers in their portfolio. However, expecting a similar trend in 2024 may be a tall ask, especially when many of the mid- and smallcaps are trading at frothy valuations.

“The key mistake that investors make is to chase momentum or the ‘next hot stock” regardless of fundamentals or quality or valuations…Good growth prospects are a must to justify high valuations,” said Mihir Vora, CIO, TRUST Mutual Fund.

Vora also pointed out that many of these stocks, particularly the PSU names, have seen a sharp surge in prices in the backdrop of a low free float, and has cautioned against getting trapped in “pump and dump” operations.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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