Sterlite Technologies' shares have risen 485% over the past year, closing at ₹671 this week. Despite this strong growth, retail investors have been cutting back on their stakes in the company. A report by Livemint shows that retail shareholders held 26.2% of Sterlite's shares at the end of the September quarter, down from 33.5% a year earlier.
Key Details
The drop in retail ownership has been offset by increased investments from domestic mutual funds and foreign institutional investors (FIIs). Mutual funds raised their stake in Sterlite to 12.31% from 8.04%. Meanwhile, FIIs increased their holdings by 6.5 percentage points, bringing their total to 17.8%. Promoters still hold the largest share at 42.3%.
Analysts link the stock's strong performance to a series of order wins driven by rising demand for optical fibre cables, especially in the AI sector. Sterlite is now India's largest maker of optical fibre and cables, with a global market share of 8%. The company's recent financial results have also made it an attractive option for investors.
Background
In broader market trends, retail investors are becoming more selective. A Mint analysis found that nearly half of listed companies saw a drop in retail stakes during the September quarter. Vedant Gupte, CEO of investment platform Trackk, said this reflects a portfolio cleanup rather than a loss of confidence. He noted that investors are leaning towards established companies with good valuations while also exploring riskier opportunities.
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The change in retail investor behavior may influence overall sentiment in the stock market, especially for small-cap stocks like Sterlite. Increased focus on retail holdings could lead to volatility in sectors related to optical fibre and telecommunications. Investors will be watching for upcoming earnings reports from Sterlite Technologies and other major players to assess future performance.
Based on reporting by: livemint.com