Taparia Tools' holding in focus after big dividend

economictimes.indiatimes.com:

Taparia Tools, a Mumbai-based engineering company, after it announced a dividend of ₹77.50 apiece recently. The pay out was considered exceptional given that the stock was at around ₹12 at that time. As many rushed to punch in the buy orders, they realised that the stock is hardly traded and lacks sellers.

Market participants note Taparia is a peculiar case where the company's revenue in FY23 was ₹764 crore and net profit was ₹72.32, while its market capitalisation is just ₹3.34 crore. Adjusted for the 4:1 bonus share issue and the dividend pay out, the stock is currently trading at ₹2.20 per share. For FY23, the company has paid ₹155 per share as dividend.

On Tuesday, there was a buy order for 3.36 crore shares at a 5% upper circuit of ₹2.2, but there were no sellers. Promoters — Taparia and Bangur families — own 69.72% stake of the company as on June 30. Public shareholders held approximately 9.19 lakh shares, or 30.28% of the company's equity.

As the surnames of most of the public stakeholders are Taparia and Bangur, there have been allegations that the free float is being controlled by the promoters indirectly. In response to an email query, a company spokesperson denied these allegations saying it meets the minimum public shareholding requirement prescribed under Sebi regulations. «As per securities contracts (Regulation) Rules, 1957, shareholders not being part of promoters and promoter group automatically come under the category of public,» said the company spokesperson.