Promoters taking advantage of market correction to raise stakes

Posted By: Religare
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Promoters of several Indian companies have raised their stakes in the past year, taking the advantage of falling markets to consolidate their holdings, said a media report.

The report said the shareholding pattern of over 100 firms for Q4 FY'13 showed that promoters bought shares from the open market after the slide in the market during the quarter. Sebi allows buying shares from the secondary market in tranches up to 5 per cent in a fiscal after which an open offer is triggered off.

Report said that companies where promoters have raised their holdings include HCL Infosystems, Raymond, Amtek India, Amtek Auto, Balkrishna Industries, Future Ventures, Dewan Housing, Schneider Electrics, ABG Shipyard, Gujarat Alkali, JBF Industries, PiramalGlass and Kirloskar Industries, among others.

The stock of most of these companies is trading at 5-year low currently while all of them have price-to-book value at below 2.

Analysts said that buying back of stock by promoters boosts investors' confidence while prices could go even further down if indices continue to fall.

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