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Company promoters seem to have used the extreme market volatility in the April-June quarter to either increase or decrease their stakes. While 71 companies has seen the promoter stake increase by more than a percent as many as 94 companies has seen the promoters' stake go down by a percent. A majority of these companies belong to the midcap and smallcap sector.

 

These promoters could include directors and their relatives, Indian and foreign promoters, NRI promoters, corporate bodies, holding companies and persons acting in concert. And this significant change in promoters' shareholding pattern could either be a result of open offer, buy back of shares, issuance of preference shares to itself and creeping acquisition or a combination of all.

 

However, market experts agreed that it is difficult to ascertain the different routes via which this change in the promoters' stake was brought about.

 

It should be noted that the most of the indices including the 30-stock benchmark BSE Sensex had reached their pinnacle during the second week of May. The markets then corrected severely till June 14 following a meltdown in global commodity prices as was reflected by fall in prices of metals on the London Metal Exchange, LME.

 

Company promoters may have used the euphoria preceding the rally that culminated on May 10 to sell their stakes at higher prices market analysts believe. Contrarily, they might have used the violent correction that followed to ramp up their shareholding. This might have been done via the creeping acquisition route or by an open offer to the company shareholders as well.

 

According to SEBI guidelines promoters of a company can acquire not more than 5% of its own shares via the creeping acquisition route in a year. Also, the other way that the promoters can increase their shareholding in a company without violating the SEBI rule is by taking the approval of their shareholders for preferential allotment of shares to themselves.

 

Companies where promoters' stake jumped by more than 10% in Q1FY07
Company	30/06/2006	31/03/2006	G/L (%)
Podar Knitex	79.66	30.18	49.48
Siel	69.8	22.02	47.78
Amrit Enterprise	65.45	37.49	27.96
Foseco India	92.66	66.48	26.18
OCL India	61.16	35	26.16
Woo Yang Electr.	44.93	20.96	23.97
Oriental Veneer	53.2	30.82	22.38
Jayaswals Neco	48.97	26.86	22.11
JM Financial	70.27	50.55	19.72
Shasun Chemicals	57.54	42.31	15.23
Guj. Ambuja Cem	23.96	9.01	14.95
Unitech	74.57	60.28	14.29
Bindu Synthetics	43.29	33.23	10.06
Source: CapitalinePlus

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Out of the shareholding pattern of 1067 companies that have been reported so far promoters of 19 companies have increased their stake by over 5% with 13 of these ramping up their stakes by more than 10%.

 

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