Suzlon Energy, YES Bank, Tata Power: Retail investors lose big as fav stocks tumble

Shares of all the 35 BSE500 companies, where retail individuals with less than Rs 2 lakh shares owned over 20 per cent stake, are in the bear grip, with erosion in market capitalisation of certain stocks hitting 70 per cent mark!

Shares of Olectra Greentech Ltd, Ujjivan Small Finance Bank Ltd, Easy Trip Planners Ltd, Zee Entertainment Enterprises Ltd, Sammaan Capital Ltd and Happiest Minds Technologies Ltd, where retail investors owned 32-35 per cent stakes at the end of December quarter, are down 28-53 per cent from their 52-week high levels.

Tata Elxsi Ltd, Indian Energy Exchange Ltd, HFCL Ltd, Gujarat State Fertilizers & Chemicals Ltd, Titagarh Rail Systems Ltd, Ircon International Ltd, Tanla Platforms Ltd, RBL Bank Ltd and Suzlon Energy Ltd are among stocks that have lost 38-63 per cent of their market values since their one-year high levels. Retail ownership in these companies stood at 24-29 per cent in the December quarter.

"Despite the correction, midcap and smallcap stocks continue to be more expensive than their 5-year averages. The decline in largecap stocks (below their 5-year average P/B) and the higher P/B ratios of mid & smallcaps (above their 5-year averages) suggest a normalisation of valuations,” said  Vikram Kasat on Market, Head - Advisory at PL Capital.

B&K Securities said the market has seen a free fall, especially in the mid and smallcap segment. A perfect storm has happened as high valuations have met global uncertainty, domestic slowdown, corporate earnings cut, tightening monetary conditions and adverse flows.

"With the fall in market, valuations have become better but are far from their lows," it said.

Data showed PCBL Chemical Ltd, Engineers India Ltd, Tata Power Company Ltd, Amara Raja Energy & Mobility Ltd, NCC Ltd, Sterling and Wilson Renewable Energy Ltd, Praj Industries Ltd, Tata Technologies Ltd and YES Bank Ltd have lost 31-69 per cent from their 52-week highs.

"Traders and investors should exercise caution in stock selection and risk management, avoiding the temptation to average down loss-making positions or engage in bottom fishing, particularly in the midcap and smallcap segments," said Ajit Mishra – SVP, Research, Religare Broking.

The deepening panic in the country’s smaller share segments signals a challenging environment for investors in the near term, said Ashika Stock Broking said in its March note. "The Nifty midcap and smallcap indices have already experienced significant corrections of 21 per cent and 30 per cent, respectively. The possibility of an additional 3-5 per cent drop cannot be ruled out in the near term, the brokerage said.