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What India's Growing Pool Of Newbie Retail Investors Has In The Portfolio

Top companies have seen their shareholder base widen as the retail investor pool more than doubled from the pre-pandemic levels.

At opening bell, the S&P BSE Sensex and the NSE Nifty 50 traded little changed at 39,317 and 11,683 respectively.
At opening bell, the S&P BSE Sensex and the NSE Nifty 50 traded little changed at 39,317 and 11,683 respectively.

India's top companies have seen their shareholder base widen as the retail investor pool more than doubled from the pre-pandemic levels.

The number of active retail investors in stock markets rose from around 30 lakh in January 2020 to around 78 lakh by the March 2023, according to NSE data. While that's a twofold jump, it has fallen off the peak of 1.18 crore hit in January 2022.

The count declined as work from home tapered off and people returned to offices. Moreover, investors have also been migrating to mutual funds, which added 40 lakh new registered users in the last fiscal—after a record addition of over one crore in the previous year.

As record demat accounts opened across the country during the pandemic, blue-chip companies also saw influx of new investors. That not only diversified their shareholder base but also expanded the investor pool.

Tata Motors Ltd. has the largest investor base among the Nifty 50 constituents, followed by Tata Steel Ltd. and Reliance Industries Ltd., according to data reviewed by BQ Prime.

The surge in the number of Tata Motors and Tata Steel shareholders underscores investor interest in the two stocks as share prices rose 500% and 265%, respectively, in the last three years.

By comparison, Reliance Industries' shareholder pool rose about 27.8% despite a successful rights issue to raise over Rs 50,000 crore from investors and near twofold gains in the last three years.

To be sure, Yes Bank Ltd. has the largest investor base of 50.57 lakh but the private lender is not part of the Nifty 50 index.

Adani Enterprises Ltd.'s shareholder base rose the most, by over ninefold, in the three years since March 2020. The company had 7.46 lakh investors as of March 2023.

Wipro Ltd., HCL Technologies Ltd., Divi's Laboratories Ltd., Adani Ports & SEZ Ltd., BPCL Ltd., and Tata Steel Ltd. saw their investor bases expand fourfold during the period.

And it rose over 2.5 times for IT bellwethers Infosys Ltd. and Tata Consultancy Services Ltd.

Sun Pharmaceutical Industries Ltd., JSW Steel Ltd., Maruti Suzuki India Ltd., Grasim Industries Ltd., Larsen & Toubro Ltd., and State Bank of India saw the least growth in their shareholder base.

Banks and financial services companies, except for Bajaj Finserv Ltd. and Bajaj Finance Ltd., recorded muted additions, with SBI recording a 14.4% rise.

Among consumer goods makers, Hindustan Unilever Ltd., ITC Ltd., and Tata Consumer Products Ltd. more than doubled their shareholder base, while Nestle Ltd. and Britannia Industries Ltd. saw it rise by a little over 50%.

Within the auto sector, Tata Motors and Eicher Motors saw the biggest expansion in shareholder pool, while Maruti Suzuki saw the least.

Disclaimer: AMG Media Networks Ltd., a subsidiary of Adani Enterprises Ltd., holds 49% stake in Quintillion Business Media Ltd., the owner of BQ Prime.