Promoters acquire stocks, as price slump

KS Badri Narayanan Chennai | Updated on March 26, 2020

Tata, Bajaj, Maruti Suzuki among 89 cos saw big accumulation by promoters


As the market corrected sharply, promoters have opened their purse in a big way to buy stake in their company.

According to a study by Motilal Oswal Financial Services, the highest quantum of promoter buying was seen in the Tata Group (Tata Chemicals, Tata Steel, Indian Hotels, Tata Motors, Tata Power and Tata Consumer), the Bajaj Group (Bajaj Finance, Bajaj Finserv, Bajaj Holdings and Bajaj Auto), Mphasis, Maruti Suzuki, Sun Pharma and GMR Infra.

Beside,. L&T has increased its holding in Mindtree (from 60.55 per cent to 61.07 per cent) and Tata Sons’ chairman, Natarajan Chandrasekaran’s recent purchases of Tata Group shares.

The broking firm compiled a list of buying and selling activity in the secondary market where the deal size is at least Rs 1 crore. Indian

Markets have seen an unprecedented correction over the last month, and a half Nifty is down 36 per cent from the recent highs. Many stocks have seen significant and meaningful corrections, said Motilal Oswal and added: "We have noticed heightened activity in promoters buying/raising stakes".

As the market goes through this period of correction, many companies (Sun Pharma, Emami, Dalmia Bharat Ltd, MOFSL, Granules etc), it added.

"We expect the buy-backs to accelerate, given the prevailing juicy valuations across sectors. Any relaxation on the buy-back tax front can provide a catalyst for more activity, in our view," MOFSL said.

While most promoters have accumulated shares from the open market, there are some companies where the promoter holding has reduced over the last month, it said. Among them included IIFL Wealth, Dixon Technologies, Varun Beverages, Aarti Industries, UltraTech Cement, Wheels India, Divi's Laboratories, Alkem Laboratories, Mold-Tek Packaging and LG Balakrishnan & Bros.


Published on March 26, 2020

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