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It’s one of those things that sounds made up until you look at the hard, cold data. An analysis of Dalal Street’s most popular stocks from March 2024 to March 2025 shows that retail investors join the rally too late and exit too soon.
How exiting early cost Paytm, HDFC Bank, IEX investors
Take Paytm, for instance. It saw an exodus of over 2.6 lakh retail shareholders, one of the highest that year, after the stock fell 52 per cent the prior year. However, if these investors had stayed invested, they would have seen the share rebound by over 150 per cent by May 2025! The trend checks out for other most-sold stocks like HDFC Bank, Bajaj Finance and Indian Energy Exchange. See table
Exits at the bottom means missing recovery rally
| Company | Stock Rating | Decrease in shareholders | Share price returns (%) May 2023-24 | Share price returns (%) May 2024-25 |
|---|---|---|---|---|
| LIC | Un-rated | -3,38,657 | 73 | -15 |
| HDFC Bank | 5 | -3,18,780 | -6 | 28 |
| Paytm | 3 | -2,60,017 | -52 | 154 |
| Infosys | 4 | -2,27,541 | 13 | 8 |
| IEX | 5 | -1,85,393 | 1 | 23 |
| SBI Cards | 5 | -1,85,239 | -20 | 28 |
| UPL | 2 | -1,57,502 | -24 | 28 |
| Jubilant FoodWorks | 3 | -1,25,158 | -1 | 41 |
| AWL Agri Business | 3 | -1,16,159 | -26 | -25 |
| Bajaj Finance | 5 | -96,608 | 1 | 35 |
| Top 10 companies with the highest retail shareholder reduction from March 2024 to March 2025 | Share price returns as of May 26, 2025 | ||||
| Company | Stock Rating | Decrease in shareholders | Share price returns (%) May 2022-23 | Share price returns (%) May 2023-24 |
|---|---|---|---|---|
| LIC | Un-rated | -6,52,021 | -26 | 71 |
| Adani Power | 4 | -3,64,332 | -18 | 173 |
| Wipro | 3 | -2,91,863 | -11 | 18 |
| TCS | 3 | -2,87,269 | 3 | 17 |
| IRCTC | 4 | -2,17,285 | -2 | 79 |
| Adani Enterprises | 2 | -2,09,571 | 24 | 33 |
| Reliance Industries | 3 | -1,76,382 | -3 | 21 |
| Bajaj Finserv | Un-rated | -1,65,933 | 15 | 12 |
| Ambuja Cements | 3 | -1,59,425 | 16 | 52 |
| Avenue Supermarts | 3 | -1,50,193 | -2 | 36 |
| Top 10 companies with the highest retail shareholder reduction from March 2023 to March 2024 | Share price returns as of May 26, 2025 | ||||
Go back a year and the pattern is more or less the same. LIC’s retail investor base shrank by over 6.5 lakh from March 2023 to March 2024, following its losses the year before. But the stock recovered by 71 per cent over the year (May 2023 to May 2024).
Adani Power, TCS and IRCTC reflect the same trend—retail investors getting the timing wrong and exiting just before huge rallies.
How joining too late cost NTPC, Vodafone Idea investors
On the flip side, NTPC saw nearly 27 lakh new retail investors from March 2024 to March 2025 following a solid one-year rally of 114 per cent, perhaps on hopes that the gains will continue. But while investors piled in, the stock fell 8 per cent by May 2025. Vodafone Idea attracted a staggering 23 lakh new retail investors while losing 54 per cent of its value. See table. In almost every instance, retail investors jumped into stocks after they had already run up.
Getting late to the party
| Company | Stock Rating | Increase in shareholders | Share price returns (%) May 2023-24 | Share price returns (%) May 2024-25 |
|---|---|---|---|---|
| NTPC | 2 | 26,75,522 | 114 | -8 |
| Vodafone Idea | Un-rated | 23,43,330 | 117 | -54 |
| Tata Motors | 2 | 20,72,030 | 84 | -24 |
| GTL Infrastructure | Un-rated | 13,33,488 | 92 | -5 |
| Suzlon Energy | 3 | 13,09,795 | 355 | 40 |
| Bharat Electronics | 4 | 13,01,082 | 173 | 29 |
| Tata Steel | 2 | 12,99,023 | 66 | -7 |
| Reliance Industries | 3 | 12,60,838 | 21 | -3 |
| ONGC | 4 | 12,07,535 | 70 | -13 |
| IRFC | 1 | 11,04,363 | 441 | -24 |
| Top 10 companies with the highest retail shareholder addition from March 2024 to March 2025 | Share price returns as of May 26, 2025 | ||||
Why do retail investors keep getting the timing wrong?
Retail investors aren’t making poor decisions because they lack intelligence. Often, it's because they're reacting to emotions that all investors feel but few manage to overcome. Here are some of the common behavioural traps they fall into:
- Herd mentality: Most investors feel safer doing what the majority is doing. If everyone around is buying a particular stock, it feels reassuring to join in. But in the market, by the time something becomes popular, the best of the gains are often already behind it.
- Recency bias: This is the tendency to give too much importance to recent events. If a stock has performed well in the last few months, many investors assume it will continue to do so.
- Fear of missing out (FOMO): When a stock rallies sharply, it gets media attention, friends talk about it and online buzz builds. Investors rush in not because they’ve studied the company but because they’re afraid of being left out of the next big thing.
- Loss aversion: Losing money feels worse than the joy of making it. So when a stock falls, many investors sell quickly to avoid further losses, even if nothing has changed in the business. Unfortunately, these exits often happen right before the recovery.
What smart investors do differently
For serious investors, the key lesson is not to blindly go where retail participation is heading. Rather, you should understand why investors are buying or selling.
Stocks become attractive not because people are rushing to them but because their valuation, earnings potential, and business strength justify investment. Likewise, when a stock falls out of favour and investors begin exiting, it’s worth asking: has the business actually weakened, or is it just sentiment?
Before you leave
As always, investing isn’t about reacting to what everyone else is doing. It’s about sticking to your plan, understanding what you own and making decisions based on value, not popularity. If you want to cut through emotional noise and invest with conviction, check out Value Research Stock Advisor that offers stock recommendations built on deep research, long-term conviction and zero hype. So the next time the crowd rushes in, or rushes out, you’ll have the confidence to stay the course.
Also read: 5 popular stocks with no growth to show
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