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The stock of Chennai-based software company Ramco Systems has been on the rise amidst series of buying by one of the promoters of the company. The stock on Thursday shot up 19.9 per cent or Rs 12 a share to end the day at Rs 72.20 on the BSE, on a day when the Sensex fell by around 388 points (2.3 per cent). The stock in which FII has no stake opened flat at Rs 61.90, but rocketed in the afternoon session hitting the upper circuit limit of 20 per cent.
According to data on the BSE, Mr P.R. Venketrama Raja, Vice-Chairman, Managing Director & CEO of the company, has been continuously increasing his shareholding for the past two weeks. Mr Raja increased his stake in the company from 8.31 per cent to 9.10 per cent between November 21 and December 7.
During this period, Mr Raja bought around 1.2 lakh shares worth Rs 66.32 lakh.
Mr Raja had last increased his stake in the company during the September quarter of 2007, when it was increased from 4.21 per cent to 8.40 per cent. The number of shares held by Mr Raja in the company (12,89,182) had been consistent since September 2007 up until November 21 this year.
The period during which Mr Raja increased his stake witnessed a 19 per cent increase in share price from Rs 50.5 (as on November 21) to Rs 60.2 (as on December 7), a piece. Interestingly, the stock had hit its 52-week low of Rs 48.8 on November 18. The company share price has been on a downward spiral since April this year. The share price of the company fell from Rs 105, as on April 1 to Rs 50.65 as on November 18 – a straight 52 per cent drop.
Analysts believe that the stake increase shows the faith of the promoters' in the company's potential, while some others believe that this is value-buying on the part of the company promoter.
When contacted, there was no official statement from Ramco Systems on the price movement. However, a company official speaking on condition of anonymity said that it was purely speculative in nature. “We do not have anything to comment.”
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