INSUBCONTINENT EXCLUSIVE:
Trying to catch a falling knife? Chances are that you would bleed
PC Jewellers and Yes Bank, would have been wiped out.
Retail investor holding in many of the troubled stocks has seen a steady increase
The number of retail shareholders in Yes Bank increased from 9.18 lakh in December 2018 to 16.64 lakhs in December 2019 despite the stock
plunge from Rs 200 to Rs 45
Retail investors held 48% in Yes Bank at the end of the December quarter, compared with 8.8% in June 2018.
The number of retail shareholders
in Jet Airways increased from 88,445 in December 2017 to 1,50,581 in June 2019 when the stock price fell from Rs 820 to Rs 22.52
Similar was the case in several stocks such as GTL in 2010, Jaiprakash Associates in 2008, Kingfisher Airlines in 2007 or Manpasand
There are a number of cases where the stock never rebounded to the original price for decades since they started falling.
Retail investors
Most retail investors are averse to booking loss on their portfolio holdings when they see prices of their holdings drop; they would
typically look at adding or averaging out their positions irrespective of the reasons for fall in share price.
Some of these companies are
problem in these companies
Sofat, head of research, IIFL Securities.
