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NSE shares see hectic trading, tax-evaders have a field day

Foreign investors pare stake even as more local investors vie for a piece of NSE

May 23, 2022 / 11:13 AM IST

National Stock Exchange’s (NSE’s) shares are seeing heavy trading even as there is little clarity on when the bourse will be able to come out with its initial public offering (IPO). While foreign institutional investors have been sellers of late, local high networth individuals (HNIs) are on a buying spree with several new investors now picking up smaller lots. Unlike earlier, when the minimum lot size used to be 10,000 shares, now brokers are willing to engage in lot sizes of as small as 1,000 shares, or even 500 shares in some cases, accommodating investors willing to deploy smaller sums. This has resulted in a significant rise in the number of shareholders in NSE.

This explains heavy trading in NSE shares, despite the absence of a formal platform, over the past year. In FY22, around 5 million NSE shares changed hands on an average every month, which works out to roughly 250,000 shares being transacted every trading day. That’s the kind of delivery-based volumes even many midcap stocks cannot stake claim to.

Trading volume last month were down sharply to 2 million shares, but this has to be seen in the context of the broad-based sell off in the stock market. Price action in the stock, however, indicates that tax-evaders may be exploiting this liquid but unlisted stock.

A hit with HNIs