Retail investors sold over Rs 7,500 crore of stocks throughout September 2024, the biggest exodus since March this year. This is despite a massive selloff extending unprecedented highs in the Indian stock market. Meanwhile, domestic and foreign institutional investors are eager to buy stocks, accumulating them.
As retail investors withdrew, domestic companies invested ₹17,421 crore, while foreign firms acquired shares worth ₹55,855 crore simultaneously.
Profit-Taking and Shift to Alternative Asset Classes
The broad sell-off by retail investors was largely driven by a marked increase in takeovers and public offerings. This environment has tempted many retail investors to liquidate their holdings, opting instead to allocate funds to IPOs, commented Deepak Jasani, Retail Research Lead, HDFC Securities. “Due to strong activity Especially in the IPO segment, many investors are likely to shift from the secondary market to IPOs.”
Jasani also hinted at a possible shift of capital to alternative assets such as real estate and gold. This is because investors diversify their risk from stocks.
IPO Market Dynamics and Investor Tendencies
In September alone, 13 companies launched IPOs, raising a combined Rs 11,890 crore, with only one offering debuting in negative territory. While three proposals received little acclaim compared to the value of the issue, while the remaining nine increased between 18% and 135%.
This year, 63 companies have raised ₹65,345 crore through IPOs, reflecting strong investor demand for initial public offerings.
Market Performance Amidst Retail Investor Exodus
This is despite aggressive sales by retail participants. But benchmark indices Sensex and Nifty posted notable progress of 3.9% and 3.7% respectively in September. Meanwhile, the broader BSE Midcap and Smallcap indexes also rose 0.9% and 1.91%. Since January, the Sensex and Nifty have risen 18.5% and 20%, while mid- and small-cap stocks gained nearly 34%.
Wrapping Up
Retail investors unloaded more than Rs 7,500 crore in September 2024, driven by profit-taking and shifts in IPOs and alternative assets. However, domestic and international companies also saw heavy buying. As a result, the market strengthened. Sensex and Nifty continued to rise.
Demonstrating Resiliency as IPO Market Remains Vibrant Investor appetite for public offerings remains strong, with several IPOs delivering strong profits Overall, the Indian equity market has proven resilient despite the retail sell-off.
Related Blog – The competitive advantage of early AI for retailers
