When stocks fell in Q1, 100 promoters turned value buyers in their own stocks

Promoter activity in a stock often reflects problems and prospects of a business and investors use them as clues to take positions.

When the domestic equity market went through a tumultuous phase last quarter, promoters of over 100 companies from across sectors went bargain hunting and raised their stakes, as these stocks witnessed sharp drop in prices.

June quarter saw excessive volatility in the stock market, which was more acute in the midcap and smallcap space.

The BSE Sensex advanced 6.5 per cent during this period, while the BSE Midcap and Smallcap indices slipped 4.54 per cent and 7.83 per cent, respectively.




Shares of Manpasand Beverages slipped more than 60 per cent during the quarter after its auditor resigned. But the promoters used this fall to raise their holdings to 44.17 per cent as of June 30, 2018 from 44.12 per cent at the end of March quarter.

The makers of Mango Sip fruit drink has since stitched an ambitious distribution pact with Parle Products for the domestic market and announced plans to expand aggressively across India and abroad.

Promoters of GTL hiked their stake by 14 percentage points during the quarter as the stock plunged more than 40 per cent.

Among others, Bhushan Steel, Vikas Eco Tech, Nandan Denim, Arshiya, Surana Solar, Madhucon Projects, Garnet International, Jain Irrigation and Gala Global also saw promoter holdings go up during the quarter gone by. Shares of these companies witnessed 30-65 per cent fall during the quarter.

Bhushan Steel last month said stock exchanges have approved reclassification of its erstwhile promoters, who collectively hold around 3.47 per cent in the company, as public shareholders after Tata Steel took over the company. Bamnipal Steel, a wholly-owned arm of Tata Steel, is now the sole promoter of Bhushan Steel, with 72.65 per cent of the paid-up share capital.

Other midcap and smallcap firms that saw a rise in promoter holdings included Career Point, Precision Camshaft, Everest Kanto Cylinders, TD Power, Anjani Synthetics, Man Infraconstruction, Sadbhav Infrastructure Projects, Ashoka Buildcon and Vardhman Special Steels.

Promoters raise stake in a business usually when they find value in the stock or are preparing for a positive development in the company. Sometimes, they do so to prevent possible hostile acquisition.

Owners of V-Mart Retail increased their holding to 54.10 per cent by the end of June quarter from 12.70 per cent at the end March quarter. That, even as the stock advanced more than 40 per cent during this period.

V-Mart CFO Anand Agarwal recently said the company generates 85 per cent of revenues from products priced below Rs 1,000, which comes under the 5 per cent GST slab.

“We have always been a value-for-money retailer and with a low tax rate of 5 per cent, customers at the middle and bottom of the pyramid have continued to see value in the products we sell,” he said. Agarwal said GST has been ‘extremely good’ for the industry, especially for retailers.

“We have seen a lot of benefits coming in from GST in terms of simplicity of implementation, logistics as well as getting customers to like and come to organised retail,” he told ETNow. “It has been a good journey and a game changer, not just for us, but for the entire nation.”

Bright Brothers and Bhageria Industries saw more than 10 percentage point rise in promoter holding during the quarter gone by.

Promoters also hiked stakes in Indsil Hydro Power, Calcom Vision, Prerna Infrabuild, Dish TV India, Indiabulls Integrated Services, Mahalaxmi Rubtech, Maithan Alloys, Gandhi Special Tubes, BCL Industries and 21st Century Management by over 4 percentage points.

At the end of Monday, Ace Equity data showed only about 1,200 companies had filed June quarter shareholding details on BSE.

Among others, Kiri Industries, Laurus Labs, Bajaj Holdings & Investment, Crisil, ITI, VIP Industries, TCI Express, SP Apparel, Bodal Chemicals, Medicamen Biotech and Mazda also saw promoter holding go up during the quarter.