The retail investor participation in stock market is growing in smaller towns keeping pace with general financial literacy and awareness.
“Although Mumbai still accounts for almost one-third of the stock market participation, the penetration in smaller towns is growing rapidly,” financial services group AnandRathi chairman AnandRathi told Business Standard here. The capital market was the only platform, which provided a good investment opportunity to retail investors with disposable amounts of as small as Rs 5,000 to Rs 10,000.
“We are getting franchisee requests and enquiries from smaller towns with 20,000-30,000 population, which shows the investors’ interest and potential,” he underscored. Commenting on the Indian stock market, Rathi said retail investors would benefits only if their investment horizon was at least 5 years and not a few months.
Speculators and those who invested money on purely hearsay and without proper research might lose money in the current stock market condition, he warned. “When the market sentiment is bad, investors get quality stocks at good valuation. But, there is uncertainty about how long will such sentiment last,” he added. Rathi, however, expressed optimism that inflation had already peaked and in coming months, commodities and food prices would ease. “If recession and slowdown in Japan and European countries stretched further, the commodities prices would further fall, which would be a good news on inflation front for India,” he said.
The fund manager suggested the Centre to boost the domestic debt market, including government securities and bonds for making the capital market more robust and ensuring greater investor participation.
Meanwhile, AnandRathi conducted its Lucknow round of hunting for Smart Investor Season II after conducting similar sessions at Mumbai, Ahmadabad, Nagpur, Jaipur, Indore and Kolkata.