India - Students entering stock trading arena

MUMBAI: Detailed articles on global credit squeeze excite 22-year-old Anant Gupta much more than Archies and Harry Potter. The fourth trimester management student of NMIMS-Mumbai, is one of the many youngsters who forgo expensive pubs, cinemas and eateries to parsimoniously eke out money for investing in the share market.

“I started investing three years ago. My initial investment was Rs 8,000 — all of which was set aside from my pocket money,” says Anant, who is majoring in financial management and aspires to be a fund manager.

Anant’s buddy, Bharat Agarwal, who studies in the same institute, but is majoring in marketing, is also a stock market enthusiast. Bharat started trading in his father’s account, but eventually opened one for himself. “I do not invest in penny stocks; and I do not try to make quick money. I believe in making long-term investments,” says Bharat.

Unlike hardcore punters on Dalal Street, both Anant and Bharat do a lot of homework before investing. “I adopt a kind of sectoral approach; my money is evenly spread across a few upcoming sectors like oil & gas, power and infrastructure,” says Bharat.

Echoing his mate, Anant adds, “We try to get fundamental details like stock volatility, beta and risk profile of the stock from the net. Special care is taken while investing in public issues. Except for some wrong decisions, we have not lost much money, touchwood,” he says, sheepishly admitting to have invested in the Reliance Power IPO.

While youngsters investing into stock markets is not new, the past three years have witnessed a plethora of students entering the stock-trading arena. One reason for the trend, according to brokers, is that students are joining the workforce pretty early. The abundance of call centre jobs in metros and mini-metros have opened a slew of part-time income streams for students. Even under-graduates join in with salaries running into lakhs annually, plus additional attractions like joining bonuses, which in itself is a sufficiently large amount for graduate and under-graduate students.

“I started investing from my salary. The initial corpus was Rs 10,000 — a chunk emolument I received from my first employer. I worked for an year, saving enough to structure a moderate portfolio,” said 24-year-old Rashank Lalan, who is currently pursuing a management course from Pune University.

To gauge the interest among investors, ET tried getting the number of investors between 18 and 22 with large brokerages. Sharekhan — between January 2006 and July 2008 — has recorded over 20,000 registrations by youngsters between this age-group.

Reliance Money claims to have a pool of around 25,000 young investors. Even the seven-month bearish phase in 2008 has not deterred youngsters from opening trading accounts — a statement that could easily be attested by client addition in top brokerages. Religare Securities, Geojit Financial Services, Networth Stock Broking and India Infoline — all combined — claim to have opened nearly 12,000 accounts in the first seven months of the year.