COMPANIES WITH THE MOST NUMBER OF RETAIL INVESTORS
An analysis of top companies in terms of number of retail shareholders throws quite a few surprises. Companies promoted by the Ambani brothers dominate the table, as five of the Reliance companies feature in the list of top seven companies with the highest number of shareholders.
Anil Ambani's Reliance Power tops the table with 3.46 million shareholders, followed by Mukhesh Ambani’s Reliance Industries with 2.43 million shareholders. Reliance Communications (1.6 million), Reliance Infrastructure (1.1 million) and Reliance Capital (0.93 million) also feature in the top 10.
Interestingly, Suzlon Energy is ranked number six in the list with 0.96 million shareholders. The Punebased turbine manufacturer made a stellar Street debut in 2005 and its shares soared more than 100 per cent in the first three years of listing. According to market experts, many of the retail investors entered the stock during the period, expecting stellar returns. But, over-leveraging took a toll on the company as the shares collapsed in the next two years and are currently trading at ~19.
A sector-wise analysis shows steel and power companies among the favourite sectors for small investors. Tata Steel, JSW Steel, NHPC, Power Grid Corporation and NTPC feature in the list of top 20 retail shareholders. This participation could have come during the peak of commodity prices when these stocks were giving stellar returns. However, since 2014, there is a slump in both the sectors due to fall in demand. In fact, steel and power companies have one of the highest share of bad loans.
Among the banks, public lender State Bank of India has the highest number of retail shareholders followed by ICICI Bank. Interestingly, HDFC Bank, which is known to be a favourite of institutional investors — especially foreign ones — has only 0.45 million retail shareholders and doesn’t feature in the top 30. Similarly, tobacco company ITC, which has wide institutional investors' holdings, doesn’t have many retail investors.