UI 44 Average: 1,542.04 -1.00
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Market fall during the onset of country-wide Lockdown due to Covid-19 Pandemic has enticed investors from all classes to invest in the equity markets. Data shows, retail investors have made informed decision this time around.
Relentless market ascend from the Mar-20 lows has thrilled the first time as well as small time investors to experience the worldliness of multiplying the wherewithal in equity markets. There is a news in every corner of Retail investors’ contribution to the months long market bull run. BSE’s Sensex index has climbed to over 62,000 levels which is achieved faster than expected. Nonetheless, the feat is achieved with stock prices of selected medium size companies rising three to four times higher than last year’s closing price.
We have assiduously analysed the participation of the individual equity investors in our study with UNIDOW Industrial 44 (UI 44) as a kernel in this overall analysis. Forty four companies in UI 44 Average is analysed and segregated in phases of period beginning before and during the Pandemic starting from Dec 2017. Tata Steel, Tech Mahindra, Tata Consumer Products, Apollo Hospitals among others are still a preferred choice of retail investors.
While Bharti Airtel, Hindustan Unilever, Gail India and Indraprastha Gas were the choice when the Pandemic struck and the nation went into Lockdown. These companies seen as a significant spine for supporting organisation to shift their staff from offices to Work-from-home (WFH). At the same time PVR, L&T, Indigo and banking institutions were become favorite after price correction. However, the companies named above have seen buying interest only during the initial period of country-wide lockdown. Post that, investment by individual investors remained subdued when the country started opening up its economy since Jun-20. Nevertheless, returns delivered by these companies have been spectacular and performed well fundamentally in their businesses.
The deadly Second Wave of Covid-19 crumbled the healthcare services throughout the country and it renewed the fear of disease when it started fading during the initial months of 2021. However, no matter the country has reported a lot of fatalities, an emergence of a new virus variant which significantly increased the risk of infection amongst the section of communities. The equity market run-up unlike last year was continued and so do the pouring of money by individual investors. Selected companies in the sectors like Consumer Discretionary, Information Technology and Material were appealing. Majors of their industry such as Crompton Greaves Consumer Electricals, Hero MotoCorp, Tata Motors, TCS, Ambuja Cements and Hindalco Industries outshined for the retail buyers.
Two companies of the UI 44 Average stands exceptional who did not participate in retail mania during the year long bull run until recently during Sensex’s march towards 60,000. Maruti Suzuki and Titan Industries have their own fundamental weaknesses which never pleased the herd. Maruti isn’t moving its assembly line to produce Electric Vehicle immediately and its models are ageing in terms of design and features while its competitors are edging ahead. Titan Industries sells Gold, and recent time has forced people to rather mortgage their yellow metal to borrow cash for settling heap of hospital bills during Covid waves. Our study by considering components of UI 44 Average as a sample clearly shows that Individual Retail Investors were more informed this time around while putting their savings in equity.
Enthusiasm in retail participation since the onset of Pandemic is seen and remained continued even till Sep-21 quarter in Indian Hotels, Dabur India, Tata Consumer, Apollo Hospitals, Cipla, Tech Mahindra, Tata Steel and Pidilite Industries. Equity Returns of these companies are spectacular and due to their management and corporate governance style, they are preferred investment choice.
Aside from the above, there is an anomaly to the trend. Companies in the UI 44 Average like Havells India, Mahindra & Mahindra, MRF, Voltas, ICICI Prudential Life Insurance, Sun Pharma, Ashok Leyland and NTPC were least preferred by retail investors. Shrugging off their returns characteristic over the last more than one year, we have observed negative to no change in holding such stocks by individual participants. However, that does not indicate their business fundamental is weakened due to the pandemic. Mahindra has improved its prospect by launching new vehicles and improving tractor business. Covid-19 has analogously increased consciousness of insurance products – specifically medical and life risk cover. As a result, ICICI Prudential has seen a significant new premium business. But this did not attract retail participants to hold such stocks in their portfolio.
Although, Sun Pharma and Ashok Leyland on the other hand have seen a mutated growth during the period analysed and this manifests that the individual investors examined companies while placing their savings in the equity markets.
|PVR Ltd||Communication Services||-3.22||13.06||308.55||11.64|
|Bharti Airtel Ltd||Communication Services||6.8||12.29||163||23.44|
|Tata Consumer Products Ltd||Consumer Staple||7.46||-5.93||134.66||50.75|
|Bajaj Finserv Ltd||Financials||13.71||7.35||113.3||-12.13|
|Indraprastha Gas Ltd||Utilities||41.52||-13.63||98.05||12.53|
|Hindustan Unilever Ltd||Consumer Staple||13.88||19.76||83.84||8.27|
|Axis Bank Ltd||Financials||-44.17||21.16||82.92||-19.18|
|Container Corp of India Ltd||Industrials||20.39||24.75||82.79||-7.95|
|Gail (India) Ltd||Energy||6.61||59.26||78.11||15.81|
|Oil and Natural Gas Corp Ltd||Energy||3.19||0.2||75.14||4.57|
|Housing Development Finance Corp Ltd||Financials||28.13||26.48||71.46||0.45|
|InterGlobe Aviation Ltd||Industrials||21.27||-15.15||68.34||-7.79|
|Pidilite Industries Ltd||Materials||17.49||37.73||65.7||68.45|
|State Bank of India||Financials||-0.05||24.65||63.18||-13.19|
|HCL Technologies Ltd||Information Technology||7.58||15.72||55.07||136.03|
|Indian Hotels Company Ltd||Consumer Discretionary||-3.09||1.36||47.38||36.08|
|Tata Motors Ltd||Consumer Discretionary||75.01||1.64||45.12||72.47|
|Cipla Ltd||Health Care||8.56||2.05||43.79||28.8|
|Dabur India Ltd||Consumer Staple||28.96||18.83||40.16||38.78|
|Britannia Industries Ltd||Consumer Staple||62.46||28.03||40.04||27.91|
|Larsen & Toubro Ltd||Industrials||9.57||8.66||36.03||-10.56|
|HDFC Asset Management Company Ltd||Financials||0||-4.92||31.08||-10.2|
|Hindalco Industries Ltd||Materials||3.1||-1.59||30.89||5.56|
|Titan Company Ltd||Consumer Discretionary||54.78||48.95||26.22||11.67|
|Apollo Hospital Enterprise Ltd||Health Care||3.31||6.38||25.65||70.99|
|Exide Industries Ltd||Consumer Discretionary||5.83||39.28||25.31||158.97|
|Tata Steel Ltd||Materials||6.13||0.64||18.68||28.1|
|Tata Consultancy Services Ltd||Information Technology||32.64||6.29||16.1||32.89|
|DLF Ltd||Real Estate||-3.4||-7.98||15.66||5.15|
|Sun Pharmaceuticals Industries Ltd||Health Care||8.79||-7.25||15.06||-1.29|
|Havells India Ltd||Consumer Discretionary||19.45||26.05||14.72||35.91|
|Voltas Ltd||Consumer Discretionary||24.2||-5.86||14.35||13.97|
|Maruti Suzuki India Ltd||Consumer Discretionary||79.52||-9.87||12.46||13.54|
|Hero MotoCorp Ltd||Consumer Discretionary||30.3||21.98||12.24||108.46|
|Ashok Leyland Ltd||Industrials||51.58||20.94||11.83||1.07|
|Tech Mahindra Ltd||Information technology||-5.86||1.99||11.82||17.09|
|ICICI Prudential Life Insurance Company Ltd||Financials||-9.72||-3.83||7.27||-4.1|
|MRF Ltd||Consumer Discretionary||19.18||11.78||6.87||-18.18|
|Ambuja Cement Ltd||Materials||6.49||1.48||6.7||57.64|
|Power Grid Corporation of India Ltd||Utilities||-11.63||-2.32||6.02||22.01|
|Mahindra and Mahindra Ltd||Consumer Discretionary||36.85||33.73||4.98||37.2|
|Crompton Greaves Consumer Electricals Ltd||Consumer Discretionary||4.26||-2.74||0.3||35.16|
Unidical is a publication service of UNIDOW & Company.
Shareholding Data Source: BSE Website