Retail investors shed stocks, but crowd into Reliance, HDFC Bank
Small investors are becoming pickier about the stocks they own. In the September quarter, they reduced their stakes in nearly half of listed companies, even as Reliance Industries, HDFC Bank and PC Jeweller drew more retail shareholders.
A Mint analysis of 4,729 BSE-listed companies showed retail ownership (those holding up to ₹1 lakh in equity) declined in 49.4% of companies in Q2FY27, up from 47.5% in Q1FY27. The proportion recording an increase slipped to 42.4% from 43.2%, while 8.2% saw no change, according to ACE Equity data.
Vedant Gupte, co-founder and chief executive officer (CEO) of investment platform Trackk, interprets the divergence as portfolio pruning. “We read the September-quarter data as a clean-up of portfolios, not a loss of faith,” he said.
He sees two strands of buying: established businesses at more attractive valuations, and riskier momentum or turnaround bets. The disclosures, however, do not establish whether the same investors moved money between these groups.
Where the crowd grew
Four companies together recorded more than a million net retail shareholder additions in the September quarter. Reliance led with 401,762, followed by HDFC Bank with 273,525, PC Jeweller with 242,298 and Cupid with 173,458. The additions may include investors holding multiple companies.
BSE added 161,456 retail shareholders, while Coal India added 151,579. Elsewhere, Bajaj Auto lost 353,533, IDFC First Bank 138,832 and Wipro 103,653.
Gupte described BSE as a momentum bet and PC Jeweller as a turnaround opportunity, alongside investors buying established businesses after a correction.
“Appetite for risk hasn’t disappeared. It has moved into fewer, more specific bets,” he said, cautioning that turnaround hopes can disappoint and momentum can reverse quickly.
Reliance’s IPO pull
That distinction was visible at Reliance, where additions accelerated ahead of Jio Platforms’ IPO.
Reliance added 204,923 retail shareholders in March quarter and 219,986 in June quarter, before additions nearly doubled to 401,762 in September quarter. Its retail base reached 4.87 million, up about 9% sequentially, while ownership edged up to 7.24% from 7.16%.
Reliance shares fell 8.3% in the September quarter, compared with a 5.2% fall in the Sensex.
Manish Bhandari, founder, CEO and portfolio manager at Vallum Capital, estimated that half to three-quarters of Reliance’s retail shareholder additions were driven by investors seeking access to the Jio IPO. Holding just one Reliance share, costing about ₹1,300, by the eligibility date allowed investors to apply through Jio’s ₹2,500 crore shareholder reservation, alongside a regular retail or non-institutional application.
“The shareholder register tells the same story. The number of holders rose about 9% in the quarter. That is the signature of token purchases, not conviction,” he said.
The shareholder portion was subscribed 7.6 times, against about 22 times overall. Jio ended its listing day about 27% above its issue price.
The quota offered an additional application route, not guaranteed allotment. Jio’s regular retail category was less heavily subscribed, at 2.72 times.
Gupte said valuations also mattered. “The quota got investors to act. The valuation gave them a reason to stay.”
HDFC Bank’s valuation bet
At HDFC Bank, analysts see retail additions as a bet on the lender after a share-price correction.
Its retail base rose from 3.54 million in December 2025 to 4.41 million in June 2026 and 4.68 million in September 2026. Retail ownership rose from 10.32% in June and 10.87% in September.
HDFC Bank shares fell 11.2% in the September quarter, leaving the lender trading at 1.79 times its price-to-book value at September-end, compared with its five-year average of 2.69 times.
“Small investors in India have learnt to buy quality on drawdowns,” Bhandari said. Whether earnings justify that confidence remains the key question, he added. "The real tests are how many shares each new holder actually owns, and how that new cohort behaves two and four quarters after the record date.”
For Gupte, the test is whether shareholder numbers hold up in Reliance and HDFC Bank, and whether interest in momentum and turnaround stocks fades when prices cool.