Retail investors in Tier-II towns head towards capital mkt

The retail investors in tier two towns are flocking to the capital market after the public issues offered by the public sector undertakings. The stock broking oufits in the region anticipate a better participation of retail investors with the more FPOs and IPO lined up. As the Centre has planned to raise about Rs85,000 crore from the capital market by disinvesments in various PSUs, the retail investors are confident of gaining from the plethora of investment opportunities.

As the retail investors in the northern states are less active than those in other parts of India, the recent developments in the equity markets are a windfall gain for the brokers.

The Group President of Arihant Capital Market Limited R R Baldi said that the glut of government public issues would mobilise primary and secondary markets. It has helped the brokers as the new depository accounts have been opened. The government would also earn revenue as the stamp duty is charged on the new depository accounts.

He added that since the international markets have now stabilised so there is no fear of sub-prime crisis and the retail investors are coming forward.

V Kumar of Vikson Finance and Investment Limited says that the money pumped in capital market by the retail investors is not pulled out. Those who do not get shortlisted in one issue reinvest in other issues so it circulates. The participation is their bread and butter, he maintains.

After the crash in international markets as an outcome of the collapse of Lehman Brothers followed by Satyam scam the retail investors lost confidence and our business was effected. But the revival of stock market in the past four months helped us to recover our losses and the icing on the cake has come from the public issues of PSUs, he noted.

After Coal India, the issues of Power Grid, Indian Oil nad Manganese Ore India are lined up and this would give a tremendous benefit to the retail investors.

Competent Finman Pvt Ltd Chairman Sanjay Tandon says that the investors were keeping their funds in pipeline for two years for these issues and this would actually help to revive the confidence of retail investors.

Most of the brokers in the region acknowledge a growth of about 30 per cent in their business in the wake of current openings for the retail investors.