Retail investors own one in three shares in Ujjivan Small and Medium Enterprises Bank and Easy Trip Planners.

Shares of Ujjivan Small Finance Bank and Easy Trip Planners have given up 50% of their gains from their record highs. However, individual investors have consistently increased their holdings in these two companies over the past few quarters. As of the end of December 2024, it holds approximately 34% of these companies.

Stress in microfinance lending affected shares of Ujjivan Small Finance Bank, while media reports about promoter stake reduction led to a fall in online travel firm EaseMyTrip’s shares.

What’s interesting is that the increase in retail holdings is occurring at a time when institutional investors have been reducing their exposure. During the past three quarters, both foreign portfolio investors and domestic institutional investors (DIIs) have reduced their holdings in Ujjvan Small Finance Bank.

Also read: Why investments in ETFs and index funds are surging in India However, as of December 2024, retail investors and high net worth individuals own almost 61% of Ujjivan Small and Medium Enterprise Bank’s shares I am doing it. Banks accounted for 18%. Similarly, as of the end of 2024, domestic institutional investors hold less than 0.5% of Easy Trip Planner’s shares.

Other companies with significant retail stakes include Tata Elxsi (30%), HFCL (29%), Gujarat State Fertilizers & Chemicals (28%), and Ircon International (26%). It should be noted that many companies have not yet disclosed their shareholding patterns for the December quarter.

Rating agency ICRA believes that stress and seasoning in microfinance lending will weigh on asset quality indicators of small finance banks in FY25. Asset quality will remain volatile as the risk of stress spillover to other asset classes increases, the rating agency said in a report.

Also read: 2025 bond market outlook: What retail investors need to know

Manushree Sagar said, “SFB’s profitability will remain under pressure in the second half of FY25, as SFB will continue to take overdue loans to keep its reported GNPA/NNPA below the threshold required for universal bank license application. This is because it is necessary to provide and amortize the debt.” , ICRA’s Senior Vice President and Sector Head – Financial Sector Ratings.

While overall private ownership of Indian stocks has jumped to nearly 8%, foreign portfolio investors have reduced their holdings to 17% from nearly 20% about three years ago. Furthermore, according to a report by the Securities and Exchange Board of India (SEBI), household investment in stocks in India increased by 57% year-on-year as of March 2024.