In general, any increase in promoter holding in a company is considered as a good sign for investor, as it shows insiders’ commitment to a business and confidence in future growth prospects.
Data shows stocks of 46 per cent of the companies where promoter holding went up have rallied up to 350 per cent since January this year, while others declined up to 74 per cent.
Equity benchmark Sensex and Nifty have risen nearly 13 per cent since June 30 amid robust overseas inflows but are still down around 4 per cent for this period.
Aarti Industries, JSW Steel, Just Dial, Garware Technical Fibres, Indostar Capital Finance, Healthcare Global, Tata Power, Thyrocare Technologies Ingersoll-Rand (India), PTC Industries, Tata Metaliks, Mahindra & Mahindra Financial Services and Spencer’s Retail were among the prominent companies that saw an increase in promoter holding during the quarter gone by.
Shares of Thyrocare Technologies and PTC Industries have rallied more than 100 per cent since the start of 2020.
Brokerages are also positive on some of the firms along with their promoters. For instance, Centrum has an ‘add’ rating on Tata Metaliks with a target price of Rs 574. Emkay Global Financial Services is positive on M&M Financial Services with a revised target of Rs 132 (from Rs 110 earlier).
Some 18 stocks, where promoters have raised their holdings, have also soared between 100 per cent and 350 per cent year to date. They included RRIL, Tanla Platforms, Kilpesh India, Titan Securities, Confidence Finance, Ester Industries, Solara Active Pharma, Globus Spirits, Bajaj Steel and Yash Management.
September quarter shareholding data available so far showed even in some midcaps and smallcap firms, promoter have raised their holdings by over 5 percentage points.
They included GSS Infotech, Lypsa Gems, Tata Power, Norris Medicines, Titan Securities, Indostar Capital Financial, Hexaware Technologies, Wabco India, Refex Industries and Ingersoll-Rand, among others.
Analysts say promoter buying along with other positive changes in the company makes a good case for buying a stock. However, they also caution that in some cases insiders may use this means to boost a stock as a drop in share price may put them in distress if they have high share pledges.
Table: Companies in which promoters increased stake in Q2
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4 Comments on this Story
Krishnan Avinjikkad29 days ago
One has to be wary of the sudden spurt in stock prices obviously due to reported buy back or increase in stake. The upsurge in stock market despite fiscal deficit spiraling upto 115% in the wake of the pandemic which threatens to stage a come back, is suspect and is beyond human comprehension, however vehemently the so-called stock Pundits might glorify. It certainly is ill-ominous and a stark reminder of the infamous Harshad Mehta episode!
Suresh Kamath29 days ago
Yes Promoters increasing their Holding is surely ONE of the Factors gladdening the Investors Hearts and such acts give CONFIDENCE of their Management practices to Lead ahead in such difficult times in an UNCHARTED path of FUTURE
Shah 29 days ago
this chirkuut binu pillai has a comment for everything!!