The delivery ratio, or the number of shares bought as a percentage of the number of shares traded, has risen over recent months as compared to last year, on anticipation of a rise in stock markets.
According to National Stock Exchange (NSE) data, the average delivery in March was 25.65 per cent (till March 30). In February, it was 22.52 per cent, and in January, it was 25.17. In December 2009, the figure was 22.78 per cent. In comparison, the delivery ratio in March 2009 was 21.33 per cent. It was 18.65 per cent in February and 19.47 per cent in January 2009. The rise is on a higher turnover during the period.
“Investors are looking at the future. They are buying in anticipation of better growth of companies,” said Alok Agarwal, head of research at Fortune Financial Services. Last year, at the same time, he said, the economy was not doing as well and investors’ interest was low.
Experts said the delivery ratio had risen despite broader indices such as Sensex and Nifty moving in a narrow range in recent months. However, they said there had been stocks that had risen 25-100 per cent during this period.
Another reason for the higher delivery ratio is the return of retail investors to the stock market. “After the Budget, there has been clarity and it looks like retail investors are returning to the market,” said Anil Bhattar, president (equities) at KC Securities.
While foreign institutional investors and domestic institutions were regular buyers, retail participation was not much last year. After the run-up in stock prices last year, retail investors kept away, as they feared the stock market might fall. But, Bhattar said, their confidence was returning as stock prices had stabilised. The Nifty has almost doubled since the low of 2,540 in March 2009. It has been moving in a narrow range in the past four to five months.
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| Month | Delivery (in %) | Average daily turnover (in Rs crore) | Month | Delivery (in %) | Average daily turnover (in Rs crore) |
| Mar-10 | 25.65 | 13,595 | Mar-09 | 21.33 | 10,140 |
| Feb-10 | 22.52 | 12,257 | Feb-09 | 18.65 | 7,887 |
| Jan-10 | 25.17 | 17,813 | Jan-09 | 19.47 | 9,559 |
| Dec-09 | 22.78 | 13,948 | Dec-08 | 19.78 | 10,141 |
| (Source: NSE) | |||||
Analysts said the trend in the delivery ratio looked similar to the run-up in the stock market from 2003 onwards. From a low of around 975 in early 2003, the Nifty peaked to 6,347 in January 2008. The average delivery in 2002-03 was 22.54 per cent, which increased to 24.9 in 2003-04 and 25.7 per cent in 2004-05.