The Hindu Business Line : Promoters prefer to stay on the sidelines even as pivotals crash

Chennai, July 19 Promoter groups in the pivotal stocks of the Bombay Stock Exchange (Sensex) do not see the sharp fall in company share prices as an opportunity to shore up their stakes. At least, that is the evidence from the data on shareholding pattern in these companies as of June this year.

An analysis of the 24 companies, out of the 30 stocks that constitute the Sensex, which have furnished their data on shareholding pattern as of June 30 this year, shows that in as many as 12 stocks there were absolutely no changes in their (promoters’) holdings while 10 others saw only a negligible movement.

Only two companies – Maruti and HDFC Bank – reported significant changes in the promoters’ holding. While the former saw an accumulation of three percentage points, the latter witnessed a decline of 3.82 percentage points in the promoters’ holding.

Reliance Infrastructure, formerly known as Reliance Energy Ltd, which announced a buyback plan saw promoters’ holding rising only marginally to 36.65 per cent against 35.95 per cent last quarter.

The phenomenon of foreign institutional investors (FIIs) scaling down their exposure to Indian stocks is very much in evidence in the Sensex stocks as well. They have reduced their holdings in 19 companies even as they increased their stake in five others. Overseas investors’ as a class sold about Rs 14,032.5 crore in April-June quarter, bulk of which came in June that accounted for Rs 10,095.8 crore.

HDFC Bank, Tata Consultancy Services, Tata Steel, Reliance Communications and Infosys Technologies saw FIIs’ accumulation during the latest quarter.

Even in this bear phase, insurance companies came to the market’s rescue by hiking their stake in 20 companies. Retail investors too have hiked their stake in 13 companies in modest proportions.

The negative sentiment has extracted a toll in terms of declining share prices with only six companies posting positive returns for the quarter – Infosys (21.3 per cent), Ranbaxy (19.2 per cent), Satyam Computer (10.8 per cent), TCS (5.9 per cent), Tata Steel (5.1 per cent) and Wipro (3.1 per cent).

The biggest losers were DLF (38.7 per cent), Ambuja Cements (37.5 per cent), Reliance Infrastructure (37.3 per cent), ACC (36.8 per cent) and JP Associates (36.5 per cent).

The BSE Sensex tumbled about 14 per cent in the April-June quarter.

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Insider ‘buys’ in falling market

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