On Dalal Street, sheer market size is no longer the magnet for retail capital. In an aggressive hunt for direct alpha stocks, India’s individual investors are increasingly bypassing traditional mega-cap heavyweights in favor of volatile, high-beta swing stocks that offer sharp price movements.
As a result , the largest corporations by market capitalization are no longer the ones commanding the biggest retail shareholder bases. Instead, high-swing counters which have long been popular for their rapid price momentum are dominating the popularity chart, as per date from Prime Database.
The best example for this trend is the private lender Yes Bank whose stock has undergone at least seven cycles of steep rise and correction in last five years. It is the second largest company in terms of number of shareholders.
While its market capitalisation is just Rs 51,000 crore, it has over 58.44 lakh retail investors as on June 30, data showed. In contrast, HDFC Bank, India’s largest private sector lender, has only 45 lakh investors while State Bank of India(SBI), India’s largest public sector lender, has only 39 lakh retail investors, data showed. HDFC Bank has a market cap of Rs 10.7 trillion, while SBI's market cap stands at Rs 8.9 tillion.
Vodafone Idea is another example of a high volatility stock widely owned by retail investors. The company has over 58 lakh investors, marginally behind Yes Bank and is the third largest Indian company in terms of number of shareholders.