Why are retail investors rushing into stocks that have lost the most?

 

For instance, shares of Vakrangee is down as much as 92 percent from a year ago. But the number of retail investors grew almost 8x while FII holding reduced by 4 percent during the same period.

Similarly, PC Jewellers, which saw its share price tanked by 76 percent in last one year, saw over 8x increase in the number of retail shareholders, but FII shareholding reduced massively by 17 percent.

Bombay Rayon Faisons and 8K Mile Software, which witnessed a downside of more than 80 percent in their share price, saw the number of retail shareholders increasing by 4x and 2x respectively.

The number of retail shareholders in DHFL also doubled in last one year. DHFL is currently trading at 65 percent down as compared to a year ago, against the backdrop of IL&FS liquidity crisis.

Most of these stocks have also posted very poor results in the previous quarter ending September 2018.

PC Jeweller posted 38 percent dip in both topline as well as its bottom line. Vakrangee stock recorder a massive 80 percent dip in its net sales, while it’s consolidated net profit almost halved during the quarter ending September as compared to the same quarter last year.

Bombay Rayon Fashions witnessed 66 percent fall in net sales, while net losses deepened almost 20 times during the quarter from a year ago.