NEW DELHI: March quarter saw both retail and high net-worth individuals (HNIs) try to catch falling knives: they lapped up stocks that kept bleeding amid debt woes, deteriorating fundamentals and corporate governance issues.
Jet Airways, Reliance Communications (RCom) and Dewan Housing Finance Corporation (DHFL) all witnessed brisk buying by the two categories of investors during January-March.
Data showed of the 24 BSE500 stocks, where retail and HNI shareholding went up during the quarter, 14 fell up to 85 per cent during the same period. Only two have managed to beat Sensexs 8.5 per cent return so far this calendar.
These individual investors hiked stakes in the troubled telecom operator RCom by 14.4 percentage points to 37.2 per cent in March quarter from 22.8 per cent at the end of December, even as a few lenders sold pledged shares. IndusInd Bank and Axis Trustee Services sold some 15.6 per cent stake that had been pledged with them as collaterals against loans.
Promoter Anil Ambani's stake in the firm dropped to 21.97 per cent during the quarter from 53.08 per cent at December-end.
Reliance Infrastructure, another Anil Ambani-led Reliance Group (ADAG) stock, has lost two-thirds of its market value year to date. Yet small investors raised their stake in the firm by 4.7 percentage points to 14.4 per cent at the end of March quarter from 9.7 per cent at the end of the previous quarter.
The infrastructure firm was among three listed ADAG group companies where L&T Finance and Edelweiss Group invoked pledged shares during the quarter. ET in February reported that the group reached an understanding with some lenders to avoid selling any of the pledged shares until September 30.
DHFL, another stock that witnessed severe battering amid liquidity woes, also caught investors fancy. HNIs and retail investors together raised their holdings by 6.4 percentage points in the housing finance company. They held 27.8 per cent stake in the NBFC at the end of March against 21.4 per cent at the end of December quarter. Data suggests FPIs sold 4.6 per cent stake in DHFL during the quarter.
“Most investors suffered as the scrip crashed substantially. Before the stock fall, we too held the view that the company was good in terms of its business model and retail assets that it held. But the market punishes companies that are not known to have good corporate governance standards,” Mahantesh Sabarad, SBICap Securities, told ET Now.
Sabarad, however, has a brighter outlook for the company as he feels “nothing really has been disturbed on the business front.” The stock is down 35 per cent so far this year.
Jet Airways saw continuous depletion in fleet strength through the quarter amid funding delays, eventually leading to complete haRead More – Source
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