2024-09-27 15:31:27
New Delhi: Promoters are taking full advantage of the ongoing market boom. So far in the September quarter, about 180 companies have sold shares worth more than Rs 40,000 crore through open market transactions. The value of shares sold by promoters through the secondary market so far this year has already crossed Rs 1 lakh crore. This is more than double that of 2023. Last year, promoters had sold shares worth Rs 48,000 crore. In the year 2022 and year 2021, this amount was Rs 25,400 crore and Rs 54,500 crore respectively. According to BSE and NSE data, IndiGo’s parent company InterGlobe Aviation, Gautam Adani’s Ambuja Cements, Baba Ramdev’s company Patanjali Foods, Max Financial Services, KPR Promoters of companies like Mills, Easy Trip Planners, Welspun Living, Cyient DLM, Sharda Motor Industries, Signity Technologies and Ethos have sold shares worth Rs 300 crore to Rs 10,500 crore since July 1. Experts say that the promoters have booked profits due to the rise in the market and there is no reason to panic.
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Firoz Aziz, deputy CEO of Anand Rathi Wealth, said that with the market boom, it is quite common for promoters to book profits. The large-cap and small-cap indices are reasonably priced but there is some degree of volatility in the mid-cap space. Last month, InterGlobe Aviation promoter Rakesh Gangwal and his family trust sold 5.83% stake for about ₹10,500 crore. In August, Adani Group sold about 2.8% stake in Ambuja Cements for ₹4,200 crore. This month, Patanjali Foods promoters sold 10.8 million shares for ₹2,016 crore.
Similarly, the promoter entity of Max Financial Services sold 3.19% stake for ₹1,218 crore to repay its debt. Welspun Living promoter sold 49.8 million shares for ₹1,035 crore through open market transactions. KP Ramaswamy, one of the promoters of KPR Mills, sold shares worth ₹971.4 crore while Nishant Pitti, co-founder and CEO of Easy Trip Planners, sold 24.65 crore shares for ₹920 crore through a block deal on Wednesday. Experts say promoters have sold stake to comply with listing rules, reduce debt or make strategic investments in the company.
Why sell shares?
There are other reasons for this also. Rajat Rajgadhia, MD (Institutional Equities), Motilal Oswal Financial Services, said when valuations rise, it is common to see supply from the primary or secondary market. Promoters sell part of their stake for various reasons. This trend is common in mature markets and India is no exception. Investors should not consider this a cause for concern. Indian markets have performed much better. The portfolios of most foreign investors remain largely overweight. So far this year, the MSCI index has gained 26%, the MSCI Emerging Markets has gained 11% and the MSCI World index has gained 17%.