Small investors lost up to 70% of wealth in these little-known stocks

As the tide turns in the global equity market, a couple of stocks took a heavy beating amid the ongoing correction on Dalal Street since the middle of October 2021. Data shows that at least 25 little-known stocks, in which retail investors held over 50 per cent stake in the December quarter, have plunged somewhere between 10 per cent-72 per cent in less than five months.

With a fall of 71.48 per cent, Mayukh Dealtrade emerged as the top loser in the list. Shares of the company tanked to Rs 12.69 on March 7, 2022 from Rs 44.50 on October 19, 2021, when the benchmark BSE Sensex scaled its record high of 62,245.43.

Bridge Securities, Shyamkamal Investments, Integra Telecommunications and Software, Asian Petroproducts & Energy, Looks Health Services and Retro Green Revolution and Ind Renewable Energy also slipped over 50 per cent during the same period. Retail investors had a 50 per cent-91 per cent stake in the company as of December 31.

In general, sustained selling by foreign institutional investors, concerns over rising inflation and now the ongoing conflict between Russia and Ukraine have dragged the benchmark BSE Sensex by nearly 18 per cent down from its all-time high levels. As a result, the market capitalisation of BSE-listed firms have tanked by 30 lakh crore to Rs 241 lakh crore on March 7, 2022 from Rs 271 lakh crore on October 19, 2021.

In an interaction with Business Today, Mumbai-based investor Vijay Kedia said that retail investors who entered the market in the middle of 2021 or late 2021 are the major victims of the ongoing selloff.

“I always advised investors to zero in on companies which show earnings on the table and enjoy strong fundamentals,” he said, adding otherwise correction like this may continue to erode wealth if investors go with euphoria and forget the basic rules in the bull market.  

Data further highlighted that Sangal Papers, Sheetal Diamonds, Vikas WSP, SC Agrotech, Prima Agro, Srestha Finvest, Beryl Drugs, Arcee Industries, Kanel Industries, Crestchem and Tirupati Tyres stood among other favourites which also eroded investors' wealth in double-digit since October 19 last year.

Analysts are advising to lap up quality stocks. Pankaj Pandey, head-research, ICICIdirect said, “We believe volatility will remain in the near term till there is clarity over the cessation of this attack, the recent correction gives an opportunity to the long-term investors to load up on quality companies with sustainable growth visibility. In the near term, metals, IT, pharma would be the key resilient sectors. In the medium term, we continue to remain constructive on domestic capex linked capital goods and allied space and PLI oriented domestic manufacturing plays.”