Promoters hike stake in over 200 companies on brighter prospects
Promoters of over 200 companies increased their shareholdings in the quarter ended March 2024, as optimism around long-term business prospects dominated near-term concerns over elevated valuations. According to an ET study of the shareholdings of 2,300 companies, which have disclosed their fourth quarter shareholdings so far, stake increases by promoters in these firms are the highest in over eight quarters.
While some promoters raised their holdings through rights issues or converting warrants into shares, many bought shares from the open market.
For instance, Adani Group increased its stake in Ambuja Cement from 63.15% to 66.70% in the March quarter by converting the warrants issued in October 2022. Aditya Birla Group increased its stake in Grasim by 31 basis points to 43.06% in the March quarter by subscribing to the rights issue.
«With the structural growth story in India remaining strong, we view these additions by promoters as a play on both the increasing consumption domestically and an expected pick-up in exports,» said Manish Chowdhury, head of research, StoxBox. «The recent share purchases by promoters indicate that they are confident of the company's outlook and business performance going ahead.»
When promoters increase their holdings in companies, it is seen as a positive sign by investors. Founders are perceived to know best about their companies' prospects.
Companies such as Himadri Speciality Chemical, Jai Balaji Industries, Electrosteel Castings, Zydus Wellness, Ramco Cements, Paisalo Digital,
