Promoter buying picks pace in smallcaps as stocks tumble. Here's the March list

Insiders buying their own shares is a much stronger signal than selling shares, market experts say. While insider selling could be for a variety of reasons, promoter buying is a good enough sign that the stock may be undervalued. Proof of that is the fact that the promoters are willing to shell out money to back their view.

At the same time, it is not a given that promoter buying always signals undervaluation. The quantum of purchases should give an idea. If the promoter is willing to invest a meaningful amount, it means the shares are undervalued. If the quantum of purchase is not huge, the promoter may be sending out a signal that the stock is undervalued. Also read 

Mid and smallcap shares have fallen sharply this month on a combination of factors. The 30-pack Sensex is down 1.53 percent this month, so far, while the BSE smallcap index has weakened by more than 8 percent and the midcap index more than 4 percent.

The Securities and Exchange Board of India's (SEBI's) warning of "froth" in small and midcap shares, mutual fund body AMFI asking its members to moderate inflows into small and midcap equity schemes, advance tax payments leading to a liquidity crunch and the Enforcement Directorate raids on entities allegedly laundering the funds of Dubai-based hawala operator HS Tibrewala, all have weighed on market sentiment.

Here is a list of companies which have seen promoter buying in March, so far:

Insider buying

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