Smart accumulation or euphoria? Retail investors hike stakes in 363 smallcap stocks in Q4
Retail investors
raised their stakes in 363 stocks within the BSE
Smallcap index
during the January–March quarter, while reducing holdings in 361 stocks, according to Ace Equity data analyzed by ETMarkets. This near-even split suggests a cautious return of risk appetite, with investors engaging in selective buying after a sharp correction, though without signs of irrational exuberance.
The
BSE Smallcap
index, which represents the bottom 15% of the total market capitalization of the BSE AllCap, includes 939 stocks. Of these, shareholding data for 730 companies as of the March quarter is available, while the rest are yet to disclose their latest shareholding pattern.
The most notable increases in retail holdings were seen in Vakrangee (up 6.5%), One Mobikwik Systems (up 6.3%), and Spandana Sphoorty Financial (up 6%).
In 66 other stocks, the retail holding has gone up by 1% or more and up to 4.94%. Some of these stocks include Dreamfolks Services, DAM Capital Advisors, EKI Energy Services, Jindal Drilling & Industries, Samhi Hotels Aarti Pharmalabs, Hindustan Construction Company, Barbeque-Nation Hospitality, KRN Heat Exchanger and Refrigeration and Computer Age Management Services (CAMS).
The other widely tracked smallcap stocks that have seen retail ownership go up QoQ in the quarter gone by are PVR Inox, Jupiter Wagons, Balu Forge Industries, Can Fin Homes, Texmaco Rail & Engineering, Angel One, and Sobha between 2.2% and 0.92%.
By retail ownership, we mean individual investors holding shares worth Rs 2 lakh in a company.
"The rise in retail holdings across smallcaps signals a return of risk appetite post the sharp correction earlier this year. Trump's tariff pause was the catalyst—but what's striking is the selectivity as investors are clearly differentiating, not rushing blindly. This isn't euphoria—it's opportunistic repositioning after valuations reset," Anirudh Garg, Partner and Fund Manager at Invasset PMS, said, commenting on the prevailing trends.
To give some perspective, the BSE Smallcap index fell 29% from a peak of 57,827.69 on October 1, 2024, to hit the lows of 41,013.68 on April 7, 2025. While they are still down 18% (index level) from the peak, smallcaps have clawed back from the bear territory.
A 20% or higher fall is seen to be a bear zone for stocks/indices.
Kush Gupta, Director at SKG Investment & Advisory expects the trend of increased retail shareholding to last longer than one expects. In his view, investors remain confident about the space notwithstanding a one-sided correction for the past 4 months, which led to 40-50% downfall in prices of several stocks.
"We are seeing a larger allocation to smallcap space in portfolios than ever before, it is no longer a space that is only considered investable by HNIs or large family offices who can afford to risk their capital a little more than the retail investors. This democratisation of small cap is a huge shift in the industry and we will witness capital allocation to this space at a faster speed than we have before. It is safe to say that investors are seeing value investment opportunities in small caps returning back after witnessing a selling cycle," he added.
The BSE Smallcap index has already recovered 20% from the lows and on Tuesday closed at 49,143.12.
Smallcaps with QoQ cut in retail holding
The sharpest cut of 16% in retail shareholding was seen in Embassy Developments and it was followed by MM Forgings and Kamdhenu with 14% and 8% QoQ drop. In 40 other stocks, the cut was between 7% and 1%. Among them are MAS Financial Services, Sundrop Brands, Kitex Garments, Camlin Fine Sciences, Shaily Engineering Plastics, The South Indian Bank, RBL Bank, Restaurant Brands Asia, Suyog Telematics, Aditya Vision, GRM Overseas, Vimta Labs, Coffee Day Enterprises, Aavas Financiers, Ujjivan Small Finance Bank, Thangamayil Jewellery and Prataap Snacks.
The other widely tracked smallcap stocks that have seen retail ownership go down sequentially in the January-March quarter include CarTrade Tech, Nazara Technologies, Poonawalla Fincorp, Gujarat State Fertilizers & Chemicals, Anand Rathi Wealth, Bharat Dynamics, Nuvama Wealth Management, Garden Reach Shipbuilders & Engineers, Birlasoft, Cochin Shipyard, and Honasa Consumer. The stake has dipped between 1.4% and 0.15%
Also Read:
Market volatility hits high beta stocks as 92% scrips fall up to 66% from peaks. These 2 risks loom
Status quo stocks
Meanwhile, there has been no change in retail holdings in these six stocks viz. Blue Dart Express, Elantas Beck India, Kirloskar Industries, Praj Industries, Rama Steel Tubes, and Uniphos Enterprises.
Time to make positional bets?
Trump's tariff scare still lingers as the 90-day pause will end in July. The domestic markets have stablised as Foreign Institutional Investors (FIIs) have made a comeback to the domestic market. They have purchased Indian equities for the past five trading sessions, pumping in Rs 17,251 crore.
The IMF has revised India's
FY26 GDP
growth forecast downwards to 6.2% due to trade tensions and US tariffs, with a further reduction to 6.3% projected for FY27.
Prior to this, the Reserve Bank of India (RBI) and ratings agency Fitch had cut their estimates on India. In the case of market turmoil or economic slide, the preference could shift to largecap counters.
Garg is of the view that the current set-up justifies selective positional bets on smallcaps amid caution. "Valuations have reset meaningfully post-correction, and retail interest has returned. However, this window is temporary and expires in July, leaving room for both opportunity and risk. Smallcaps tend to outperform in early-stage recoveries, and India's macros—cooling inflation, stable policy, rising capex—support a near-term rally," he warned, adding that global trade overhang remains.
Gupta of SKG Investment recommends taking positional bets in companies that have a steady order book, strong management and a good track record i.e. those companies that have experienced downtrends in the past.
3 tips to make a move in smallcaps:
1. Garg calls the current situation as a tactical opportunity and not a structural bet. He recommends focusing on domestically driven, low-debt smallcaps with earnings visibility.
2. Garg prefers staying away from sectors like metals and IT in the smallcap space.
Metals are too exposed to global pricing cycles and the recent pause on Chinese tariffs could trigger supply distortions, hurting pricing power. On the other hand, smallcap IT is facing demand headwinds due to the US slowdown.
The dollar is weakening and there is a real risk to export-linked revenue stability, Invasset PMS analyst said. Auto, real estate, and metals are also 'Avoid' for Gupta.
3. Gupta is cautious about sectors that rely on discretionary spending as consumers become defensive when the economy is slowing. Smallcap stocks related to travel, household goods, hospitality, and consumer durables remain vulnerable, according to him.
His top picks include BLS International, Integrated Industries, MOS Utility, Master Trust, OBSC Perfection, Healthcare Global Enterprise, Rama Steel, and Fedder Holdings.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
India.com
41 minutes ago
- India.com
Meet Mukesh Ambani's right hand who left Rs 750000000 salary to become a sanyasi, now walks...; name is…
Meet Mukesh Ambani's right hand who left Rs 750000000 salary to become a sanyasi, now walks...; name is… Reliance Industries is one of the largest and most powerful companies in India, led by prominent businessman Mukesh Ambani. Under his leadership, the company has grown across various sectors of industries ranging from petrochemicals to retail, telecommunications, and digital services, with a firm footing both domestically and internationally. However, a conglomerate of this magnitude and complexity does not operate in isolation. The company relies on a devoted, competent, loyal, and experienced team of professionals who are committed to executing the company's overarching vision. Meet Mukesh Ambani's right hand! Prakash Shah, a confidant of Reliance Industries Chairman Mukesh Ambani, has discarded worldly existence for a spiritual pursuit. He left his prestigious job, enjoying a salary of Rs 75 crore, to take sannyas (renunciation). Shah was a Vice President at Reliance Industries and was considered Mukesh Ambani's right-hand man. Prakash Shah retired at the age of 63, and he entered spiritual life (through Diksha) shortly afterward. On the occasion of Mahavir Jayanti, he and his wife, Naina Shah, were formally Dikshad. He had always wanted to leave behind worldly life and was only waiting for the COVID-19 pandemic to end. Diksha is a spiritual initiation, where a person chooses to live a simple but disciplined life by striving to conduct oneself according to 'right' (righteous) deeds, with the hope of achieving liberation (moksha). Prakash Shah Educational Qualification Prakash Shah is a Chemical Engineer and completed his post-graduation from IIT Bombay. His wife is a graduate in commerce. The couple has 2 sons; one of them took Diksha a few years back, and the other is married with one child. At Reliance Industries, Prakash Shah managed several very large projects and made significant contributions to large projects, especially the Jamnagar Petcoke Gasification Project and Petcoke Marketing, for which he was fully accountable. Media reports indicate that, at the time of his retirement, Shah was on an annual salary of Rs 75 crore. Prakash Shah's Astonishing Salary! According to media reports, at the time of his retirement, Prakash Shah was earning an annual salary of Rs 75 crore. Despite such a successful and high-profile corporate career, he chose to step away from it all to embrace a life of spirituality by taking 'diksha'. He has forsaken material comforts for the sake of and in pursuit of a path of inner peace and spiritual emancipation. He is now a monk, barefoot, wearing plain white clothes, and living on alms. His name, Prakash Shah, is now 64 years old. Prakash's Diksha was in its entirety in Borivali, Mumbai. Ironically, his son began the spiritual path six years ago, when he took Diksha, he was given the name Bhuvan Jeet Maharaj. Recalling his longstanding wish to become a sannyasi, Prakash Shah said, 'Since childhood, I had a desire to take initiation. The spiritual bliss and mental peace derived from it are incomparable.'
India Gazette
43 minutes ago
- India Gazette
Corporate travel, MICE, live events to boost operating performance of hospitality industry: Report
New Delhi [India], June 22 (ANI): The hospitality industry will maintain strong operating performance in the near term, supported by strong corporate travel, MICE activity, live events, and a buoyant wedding season, according to a report by Antique Stock Broking Limited. As per the report, medium-term growth of the industry is expected to be driven by sustained demand-supply imbalances and a healthy pipeline of new hotel additions. The hospitality sector has significantly benefited by the increased demand from the Meetings, Incentives, Conferences, and Exhibitions (MICE) sector. 'The hospitality industry should continue to deliver strong operating performance in the near term aided by strong corporate demand, MICE, live events, and the wedding business,' the report added. This growth has resulted in a sharp increase in Average Room Rates (ARRs) and occupancy levels. The sector is expected to be in a long-term upcycle, supported by shifts in consumer preferences, rising disposable incomes, and increased travel spending, say several experts. In the fourth quarter, the large hotel firms reported strong demand, and they highlighted strong demand visibility for 1Q and FY26 driven by large-scale events, concerts, conferences and weddings. The hotel industry executives anticipate the strong rate growth momentum to continue in the near term, as highlighted in the report. Several reports say that the overall industry is expected to grow at a Compound Annual Growth Rate (CAGR) of 10.4 per cent from FY24 to FY29, outpacing supply growth at 9 per cent. India's tourism sector, rich in heritage, culture, and diversity, is emerging as a global favourite and a key driver of economic growth. Recognising its potential for employment-led development, the Union Budget 2025-26 has allocated Rs 2541.06 crore to enhance infrastructure, skill development, and travel facilitation. A major initiative includes developing 50 top tourist destinations in partnership with states through a challenge mode, ensuring world-class facilities and connectivity. As per the government data, the tourism sector's contribution to GDP regained the pre-pandemic level of 5 per cent in FY23. The tourism sector created 7.6 crore jobs in FY23. International tourist arrivals (ITAs) in India have rebounded to pre-pandemic level in 2023. The share of India's ITAs in World ITAs stands at 1.45 per cent in 2023. Foreign exchange earnings through tourism were 28 billion USD. India received 1.8 per cent of world tourism receipts and attained a rank of 14th worldwide in world tourism receipts during 2023. (ANI)
India Gazette
43 minutes ago
- India Gazette
"This is an escalation": Foreign Affairs Expert Robinder Sachdev after US strikes on Iran's nuclear facilities
New Delhi [India], June 22 (ANI): Foreign Affairs Expert Robinder Sachdev on Sunday described the US strikes on three Iranian nuclear facilities as an escalation to the week old Israel-Iran conflict, warning that the situation is likely to deteriorate further. His comments come in the wake of recent US airstrikes targeting three key Iranian nuclear facilities, including Fordow, Iran's main enrichment location for uranium enrichment to 60 per cent. 'This is an escalation, and it seems there will be no end; the situation will worsen, go up and down. It seems that the region of the Middle East will now be plunged into Forever Wars... Iran will fight back with whatever resources it has. It will retaliate. However, it doesn't have much capacity, but it will still attempt to do its best,' he told ANI. Sachdev said that US President Donald Trump's claim of eliminating the entire nuclear programme of Iran is 'wrong'. 'Donald Trump is correct in saying that tonight's attack was a spectacular attack by the American Armed forces, but he is wrong in saying that this attack has eliminated the entire nuclear programme of Iran; it has not...... The Iranians have already trandffered Uranium though it is not weapon grade but whatever enriched uranium they had, it seems they have distributed and hidden in some other locations but yes, a major blow to Iran's nuclear programme has been delivered but it does not mean that the entire nuclear programme of Iran has been obliterated,' he added. He further said that Iran's attempt to close the Strait of Hormuz could lead India to suffer, as according to him, about 20 per cent of the world's crude oil and 25 per cent of the world's natural gas flow through one of the world's most important oil chokepoints located between Oman and Iran, connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea. '...If Iran closes the Strait of Hormuz, India will definitely suffer. About 20 per cent of the world's crude oil and 25 per cent of the world's natural gas flow through these. Qatar's gas, which we buy, almost all flows through this. 70 per cent of Saudi oil comes through the Strait of Hormuz,' Sachdev said. 'India will suffer because oil prices will go up, inflation will rise, and there is an estimate that for every ten-dollar increase in the price of crude oil, India's GDP will suffer by 0.5 per cent,' the Foreign affairs expert added. After Northrop Grumman-made B-2 Spirit bombers struck nuclear facilities in Natanz, Isfahan and Fordow, Trump, in his first public remarks, warned that he could order further action if Tehran does not agree to a satisfactory peace agreement. In his address to the nation from the White House on Saturday (local time), Trump said, 'There will be either peace or there will be tragedy for Iran, far greater than we've witnessed over the last eight days.' In a Truth Social post, Trump said, 'This cannot continue. There will be either peace or there will be a tragedy for Iran far greater than we have witnessed over the last eight days. Remember, there are many targets left. Tonight's was the most difficult of them all, by far, and perhaps the most lethal. But if peace does not come quickly, we will go after those other targets with precision, speed and skill.' Trump also thanked Israeli Prime Minister Benjamin Netanyahu and said, 'I want to thank Prime Minister Bibi Netanyahu. We worked as a team like perhaps no team has ever worked before, and we've gone a long way to erasing this horrible threat to Israel.' (ANI)
