The bull run on the stock market seems to have escaped those companies where retail investors hold more than 50 per cent stake.
While the overall market capitalisation rose by a phenomenal 68 per cent last year, the prices of stocks of 365 companies in which retail investors hold over 60 per cent or more have grown only 7 per cent.
A Business Standard Research Bureau study, based on 2,385 actively traded stocks, shows that while companies where retail investors hold 50 per cent or more have underperformed, returns have been considerably higher when the majority shareholding is with foreign institutional investors and promoters.
The group of companies where promoters hold over 50 per cent each posted annual returns of 60 per cent, while companies where FIIs hold 20 per cent or more have posted an annualised returns of over 70 per cent.
Retail investors hold between 50 per cent and 98 per cent in 365 companies. This accounts for only 0.34 per cent share in market capitalisation. These companies, traded under the T, TS and Z groups, have posted 7.6 per cent capital returns in the past year.
The annualised returns progressively go up in those companies where retail investors hold relatively lower stakes.
For instance, 347 stocks where they hold between 40 per cent and 40.9 per cent have yielded a return of 34.96 per cent.
The returns go up further to 60.3 per cent in 449 companies in which retails investors' stake varies between 30 and 40 per cent.
Investors have got hefty returns of 84.9 per cent in 519 companies in which retail investors hold 20-30 per cent. The annual return is 70 per cent in 497 companies in which the retails investors hold 10-20 per cent.
The retail shareholding is below 10 per cent in 207 companies. Here the annual average return is about 55.
The stock of retail shareholders represents 15 per cent of the total equity of traded companies but only 10 per cent of the total market capitalisation.
Promoters hold 33 per cent stake in total shares but they lord over 54 per cent of the market capitalisation. The FIIs own just five per cent shares but their share in total market capitalisation stands at 16 per cent.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group
