Betting Big! Four stocks with highest increase in retail shareholders, turn multibaggers in FY24

There’s no doubt that retail investors have contributed significantly to the strong rally in the midcap and smallcap stocks in the last 7-8 months, as they went bargain hunting in this space.

Interestingly, of the top 10 stocks that saw the highest increase in retail shareholders in the last one quarter, seven of them are part of the midcap and smallcap segments, and four of them belong to the public sector space, data by Prime Database showed.

The seven stocks are Bharat Heavy Electricals, IDFC First Bank, Indian Railway Finance Corporation, Rail Vikas Nigam, SJVN, Suzlon Energy, and Vedanta.


Besides these, retail shareholding increased the most sequentially in HDFC Bank, ITC, and Tata Motors.

Further, four of the seven midcap and smallcap stocks have given multibagger returns so far in the current financial year.


In Indian Railway Finance Corporation, the number of retail shareholders as of September 30 stood at 26.68 lakhs, compared to 17.74 lakhs a quarter ago. This has been one of the best-performing stocks in the public sector space, giving returns of more than 171% so far in FY24.

While the number of retail shareholders went up in the company, FII holding has been more or less stable, but mutual funds have been steadily decreasing their holding, showed Trendlyne data.

The other rail PSU stock to attract retail investors was Rail Vikas Nigam. In this company, the number of retail shareholders increased to 13.24 lakhs as of September end from 8.75 lakhs a quarter ago. This stock, too, has given multibagger returns of over 175% so far in the current financial year.

The third PSU stock is SJVN, which saw a notable increase in the number of retail shareholders, who had subscribed to the offer for sale of the government in the last quarter. The number of retail shareholders almost doubled sequentially to 6.06 lakhs in the company. This stock has also given multibagger returns of more than 141% since April.

The other favourite company, which provides engineering solutions to the power sector, of retail investors was Bharat Heavy Electricals. The number of retail shareholders in the state-owned company increased to 12 lakhs at the end of September, from 9.87 lakhs at the end of June. This stock has given more than 98% returns to investors so far in FY24 and looks set to turn a multibagger by the end of the year.

Besides these four PSU stocks, the other power sector-related stock that grabbed the eyeballs of retail investors was Suzlon Energy. The number of retail shareholders in the renewable energy solutions provider increased by 3.73 lakhs sequentially to 28.22 lakhs as of September end. Suzlon has been among the top-performing stocks, giving an overwhelming 413% returns to investors so far in FY24.

More Steam In The Broader Market?
So far in FY24, the S&P BSE Midcap and Smallcap indices have given returns to the tune of 38% and 44%, respectively. This is far higher than the around 12% returns given by the benchmark Sensex.

Large inflows into the midcap and smallcap funds seen by the mutual fund industry, coupled with a huge increase in the number of new retail participants have been the primary triggers for the rally in the broader market stocks.

After such a rally, many experts do believe that valuations of several stocks in these segments have moved higher than their long-term averages.


“Several low-quality mid-caps and small-caps in general are in a bubble market, with the market attaching unrealistic narratives to many stocks,” says Sanjeev Prasad of Kotak Institutional Equities.

According to Prasad, the fundamentals of most sectors have not changed much in the past few months, but the market sentiment remains quite exuberant in the midcap and smallcap segments.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)