Retail stock investors made most of market surge

Retail investors who invest directly in stocks, as opposed to investing through mutual funds, appear to have come of age if their transactions on the secondary market are anything to go by. Market experts say retail investors have in recent times tended to sell at highs and buy at lower levels, a reversal of their past behaviour.

- Ram Sahgal

So far this fiscal (April-December 2023), direct retail investors have net sold shares worth ₹1.68 trillion, coinciding with a roaring rally in mid-, small- and large-cap stocks. Their selling comes after being net buyers of a combined ₹1.09 trillion in April-December 2021. In the same period (FY24), the Nifty Midcap 150 Index rallied 50% to 17,077.05, the Nifty Smallcap 250 by 60% to 14,041.30 and the Nifty returned 25% to touch 21,731.4 on 31 December 2023.

While retail investors net sold shares during this period, foreign portfolio investors (FPIs) have net purchased 1.97 trillion and domestic institutional investors (DIIS), including mutual funds, banks and insurance companies, net purchased ₹1.01 trillion, according to exchange data.