Institutional investors(mutual funds and fii) are the best line of defence for retail investors, it is always a good idea to go in for stocks which have a good percentage of shares held by IIs, because they have the resources to accurately value a company, secondly it is always possible for you get out before them because of their volume(if they want to sell).
Yes, They will come in Jai, but at very high levels. they dont like illiquid stocks where floating stock is very less.
Check the recent announcement by Jai-
Jai Corp Ltd has informed BSE that the Board of Directors of the Company at its meeting held on July 31, 2007, inter alia, has decided the following:
1. Sub-division of the equity shares from existing face value Rs 10/- per share to a face value of Re 1/- per share.
2. Increasing the authorized share capital from Rs 25 crores to Rs 50 crores.
3. Increasing the borrowing limits of the Company.
4. Issuance of further securities including by way of Qualified Institutions Placement, Follow-on Public Offer and / or raising of funds in international market.
5. Increasing the limit for investment by FIIs to 49% of the paid-up equity capital.
6. Implementation of an Employees Stock Option Scheme.
The above decisions of the Board are subject to shareholders approval and such other necessary permissions, sanctions and approvals as may be required under applicable laws.
And when that happens The retail/small investor will say why I did not enter in this before. This is not your conventional 15-20% annual return stock. This is High Risk even higher return stock. Small investors could do with investing 5%+ of their capital in these type of stocks. The main aim in stock market is to identify stocks very early and not when the whole world knows about it to eat the real fruit and not let the select few to eat the cream.
My Views only-Take your own call- It is your money.
