The Hindu Business Line : Insider ‘buys’ in falling market

Prominent buys
Mr Harsh Mariwala in Marico (8 lakh shares on June 5), Mr Rajiv B. Lall (Managing Director and CEO) in IDFC, picked up 4.5 lakh shares between June 11-13.
Tata Motors (promoter entity of Automobile Corporation of Goa) acquired 1.8 lakh shares.
Bijli Investments, a promoter group entity of multiplex operator PVR, also bought some 17,000 shares in the company at Rs 180 per share.

BL Research Bureau

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Want a signal that stock prices are bottoming out? You may find it in the insider trades reported by the stock exchanges. The number of ‘buys’ reported in insider trades has outpaced the number of “sells” over the past week, with promoters of some prominent companies purchasing their stock.

Data submitted to bourses over the past week show that for every “sell” trade by an insider, there were at least two “buys”, albeit in different counters. A look at the disclosures relating to insider trades (which falls under SEBI Trading Regulations) show that over 30 companies reported buying by insiders, while selling has happened in only 15 or so.

Buyers galore

Prominent insider ‘buys’ in recent weeks were Mr Harsh Mariwala in Marico (8 lakh shares on June 5), Mr Rajiv B. Lall (Managing Director and CEO) in IDFC, who picked up 4.5-lakh shares between June 11-13 and Tata Motors (promoter entity of Automobile Corporation of Goa), which acquired 1.8-lakh shares. Bijli Investments, a promoter group entity of multiplex operator PVR, also bought some 17,000 shares in the company at Rs 180 per share.

Except Automobile Corporation of Goa, share prices of PVR, Marico and IDFC have risen by 3-10 per cent from the dates of purchase. Companies such as Zenotech Laboratories, Advani Hotels & Resorts, Patel Engineering, Bhuwalka Steel Industries, Man Industries and Ritesh Properties also saw promoters or top management buying shares.

Some sells

Amongst prominent insiders in the ‘sell mode’ were Mr Yogesh Chander Deveshwar who sold 1 lakh shares of the FMCG major between May 30 and June 2 at an average price of around Rs 220 (current market price is Rs 203) while Deccan Aviation Director, Mr Jayanth K. Poovaiah, sold 20,000 shares at Rs 104 per share on June 4; the stock is trading at similar levels currently.

Mr Anil Harish, a director of real estate major Unitech, has also sold 1-lakh shares at Rs 209 per share before June 6. Companies where insiders sold stocks include IT companies such as Aztecsoft and Satyam Computer Services.

Market watchers say that some of these instances of insider trades may be the result of employees cashing in on stock options.

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