Retail investors: Top December retail stock picks point to the rise of the ‘informed’ investor
A study of the December quarter shareholding pattern shows retail investors have increased their holdings in nearly two dozen Nifty stocks, including Tata Steel, Coal India, TCS, Reliance Industries, ICICI Bank, HUL, IndusInd Bank, HDFC Bank, Titan, Hero MotoCorp, among others.
“More and more investors now understand the importance of investing in markets for long-term wealth creation but at the same time want to make informed decisions by doing their research or seeking expert help,” said B Gopkumar, CEO, Axis Securities.
Tata Power in the December quarter witnessed a record 1.4 million increase in retail investor base. The company has the third-highest retail shareholder base after Yes Bank and Reliance Industries. Tata Power shares rallied 35% in the December quarter fuelled by power consumption growth in August, an international coal price rally, a possible listing of the renewables business at a premium, and the setup of 1,000 electric vehicle charging stations with a target to reach 10,000. It further gained 9% since January 1.
Retail investors also lapped up shares of IRCTC, with their numbers increasing by 1.1 million to 1.96 million as of December 31, 2021.
The majority of the stocks retail investors bought in the December 2021 quarter were large-caps and top midcaps. Their top picks in the December quarter were Trident, Tata Steel, and Jaiprakash Power, which have respectively rallied 21%, 8%, and 54% since January 1, 2022.
In the past two years, the growing army of retail investors has become an influential force in the Indian stock market. Their flows helped cushion the decline in the market between October and December when foreign portfolio investors sold shares to the tune of ₹68,300 crore. During the December quarter, over 10.3 million new investors have been added by brokerages, show NSDL and CDSL data.
Other stocks where retail investors increased their stakes in December include Coal India, ICICI Bank, Suzlon Energy, and Indian Oil Corporation, which have returned over 10% since the beginning of the year.
