Retail investors cash out of the market

Retail investors have offloaded most of their holdings in the equity markets, and following the footsteps of domestic mutual funds, they have cashed out during the recent market rally.

An analysis of the shareholding pattern of the 50 CNX Nifty companies reveals that public holding in these stocks has declined in the range of 0.3 percentage points to 12.85 percentage points in the last one year.

Out of these 50 companies, retail shareholders have reduced their holding in 46 companies to the extent of 12.85 percentage points. On the other hand, mutual funds, including UTI Mutual Fund, have cut their holdings in 35 companies upto seven percentage points from the levels at the end of March 2003.

The public holding in nine CNX Nifty stocks"" Reliance Industries, ACC, Larsen and Toubro, Oriental Bank of Commerce, Mahindra and Mahindra, Tata Tea, Reliance Energy, Hindalco and Grasim Industries""declined by more than four percentage points in the last one year.

Retail investors have sold out most of their holdings in automobile companies in the index. These companies include Bajaj Auto, Hero Honda Motors, Maruti Udyog and Tata Motors. Their holding in these stocks declined in the range of one to two percentage points.

The public holding in other 11 stocks including Zee Telefilms, Tata Power, Tata Steel, Satyam Computer and Ranbaxy Labs also declined in the range of one to two percentage points in the last fiscal while in another 26 companies, these cut their stake between one to two percentage points.

The public holding in Associated Cement Companies (ACC) has dropped by 12.85 percentage points, from 35.48 per cent a year ago to 22.63 per cent on March 31.

In Larsen and Toubro, retail holding declined by 8.84 percentage points to 22.27 per cent (31.11 per cent) and in Oriental Bank of Commerce by 7.02 percentage points to 7.97 per cent (14.99 per cent).

During the last one year, the S&P CNX Nifty appreciated by 81 per cent to 1,771.90 on March 31 from 978.20 on March 31, 2003.

However, mutual funds' holding in 12 companies including HPCL, Reliance Industries, Tata Motors, Tata Steel, ICICI Bank, Cipla, ABB, Shipping Corporation, Hindalco and Bajaj Auto, declined by more than three percentage points in the last one year, while in 12 stocks""mainly Hindustan Lever, Zee Telefilms, HDFC and Mahindra and Mahindra""their holding reduced in the range on one to two percentage points.

Mutual funds holding in oil refiner HPCL declined by 6 percentage points from 14.26 per cent in March 2003 to 8.26 per cent in March 2004.

In Reliance Industries, MF's holding declined by 5.13 percentage points, from 6.96 per cent to 1.83 per cent. In Tata Motors, MF's holding declined by 4.90 percentage points to 2.93 per cent (7.83 per cent) and in ICICI Bank by 4.4 per cent to 0.34 per cent (4.74 per cent).