RE:RE:RE:As usual At the time when institutional investors reduced their participation in trading activities in FY21, retail investors turned aggressive and their market share rose sharply to 45% amid rising uncertainty over the Covid-19 pandemic. In simple words, it means that if the average daily trading volume on the exchange is Rs 70,000 crore then nearly half of that is traded by individual investors.
Why is retail participation is on the rise?
There are multiple reasons for the rise of retail investors in the market. Niteen S Dharmawat, co-founder, Aurum Capital, said: “The most important is the relatively poor returns by other assets and lower interest rates on bank deposits. Many of the investors have come for the first time. This coupled with technological proliferation provided very easy access to the market to people seating at home during the pandemic.”
Besides, the significant rise in the share of individual investors in FY21 can be attributed to the increase in new investor registrations witnessed in 2020-2021.
G Chokkalingam, founder, Equinomics Research and Advisory said, “Firstly, individual investors were attracted by the cheap valuation of stocks post March 2020 crash. Later, two crore new retail investors entered the market when they saw a massive rally in midcaps and smallcaps. They are continuously buying stocks. Roughly, one lakh new investors are getting registered in equity markets every day from the start of 2021.”
Top sectoral exposure
Sectors like trading, finance, IT, textile, pharmaceutical, construction and engineering are among the favourites of individual investors including high networth investors. On the other hand, they have minimum holdings in sectors like ports, e-commerce, courier and insurance, among others.
https://www.money9.com/news/markets/market-news/individual-investors-are-now-big-bulls-of-indian-equity-markets-with-nearly-50-trading-volume-33749.html