In the first six months of the year, the average number of deals a month stood at 1,264, against 1,484 in the six months ended December 2012

Though shares of many companies, especially mid- and small-cap ones, are available at throwaway prices, these are yet to attract the India’s wealthy investors.

The general aversion of the rich towards stocks is reflected in data on recent bulk deals on exchanges, which have seen a decline in the last few months. In the first six months of the year, the average number of deals a month stood at 1,264, against 1,484 in the six months ended December 2012.

Bulk deals are defined as those in which the total shares bought or sold are more than 0.5 per cent of the equity shares of the company listed on the exchange. Bulk deal activity is considered an indicator of the appetite of high net worth individuals (HNIs) for stocks, as this class of investors usually buys or sells in major quantities.

Wealth managers said equities had clearly fallen out of favour with HNIs. “Unless you make money (in equities), you are not going to come back. Investors are looking for asset classes that are safer and give better returns,” said Ambareesh Baliga, managing partner at Edelwiess Global Wealth.

In the last six years, equity markets haven’t seen substantial movement, with the BSE Sensex and NSE Nifty trading at the same levels today as they were in 2008. “Between 2000 and 2008 January, the market cap of the indices increased eight-fold. The market cap of about 50 companies in the BSE 500 was higher when the Sensex was trading at 8,200-levels, compared to what it is today,” said Chokkalingam G, executive director and chief investment officer, Centrum Wealth Management. “They have failed miserably in rewarding investors.”

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