Mumbai: A large number of promoters raised shareholding in their small-cap and mid-cap companies where share price had fallen sharply during the January-March quarter, which indicates their perception of higher intrinsic value for the stock than what the market price reflected.
In contrast, promoters raised their stake in only six of the 30 Sensex companies while they reduced stake in eight blue-chip companies.
The Nifty Mid-cap 150 Index is down 11.66 per cent in the last one year while the Nifty 50 is up 9.18 per cent, indicating large price erosion in mid-caps and small-caps versus large-cap stocks.
The Sensex companies in which promoters raised stake were Bajaj Auto (51.18 per cent from 49.30 per cent), Bajaj Finance (55.17 per cent from 55.15 per cent), Reliance Industries (47.27 per cent from 47.19 per cent), Infosys (12.84 per cent from 12.82 per cent) and Tata Motors (38.37 per cent from 37.27 per cent).
The Tata Motors stock had hit a low of Rs 141.90 on February 8, 2019 on negative outlook for its foreign subsidiaries, providing a buying opportunity for its promoters.
Other large-cap companies where promoters raised their stake were Bajaj Finserv, JSW Steel, Dabur India, Bosch, Bajaj Holdings and Investment, MRF, Future Retail, Alkem Laboratories, Indiabulls Ventures, Jindal Steel & Power.
Promoter holdings were up in public sector entities like Punjab National Bank, IDBI Bank, Bank of India, Bharat Heavy Electricals and Allahabad Bank because of the government’s disinvestment and strategic sales programmes.
Promoters reduced their stake in more than 300 companies and such companies mostly seem to be concentrated in the large-cap category.
Among the Sensex pack, eight blue chips saw promoters reducing their stake in small quantities. HDFC Bank promoters reduced their stake from 26.54 per cent to 26.50 per cent as the stock has been hitting new 52-week highs since the beginning of March.
In Axis Bank promoter stake came down from 23.71 per cent to 18.70 per cent as government sold its 4.09 per cent stake through an offer for sale in February to boost its divestment corpus before the fiscal end.
Barring Punjab National Bank and BHEL, promoter Government of India’s holding got reduced in public sector enterprises.
