Direct retail inflows seen declining as weakness in mkt weighs on sentiment

Direct retail inflows are seen waning in 2022 as weakness in the market weighs on sentiment. 

During calendar year 2021, individual investors poured a net Rs 1.4 trillion into the cash market segment of the National Stock Exchange (NSE), the country’s largest bourse. 

During the March 2022 quarter, net retail flows stood at Rs 49,700 crore, data provided by the exchange shows. 

The net flows for the recently-concluded June 2022 quarter aren’t available yet. 

However, there are tell-tale signs that individual investor flows have slowed. The average daily turnover for the cash market segment slipped below Rs 40,000 crore for the first time since February 2020. 

Further, the share of individual investors in the cash market turnover, which had shot up to 45 per cent in FY21, has fallen to 40.7 per cent in FY22. 

Also, the face of new demat account openings too has moderated. “Retail investors are by nature bullish. So unless markets are on an upward trajectory, retail participation reduces. This year will be a tough year as volatility will be at its peak,” said E Prasanth Prabhakaran, MD & CEO, Yes Securities.