Promoters are cashing in on the market boom, but not without a cost. Their stakes in listed companies fell to a multi-year low in Q4FY25, with a surge in block and OFS (Offer for Sale) deals suggesting strategic exits, often at a significant discount to market prices.
May 2025 has already seen over Rs 58,000 crore in such deals — the highest since August 2024’s Rs 75,000 crore exits. Experts say this selling spree, despite rich valuations, is raising red flags.
Key deals
Key recent sales include British American Tobacco’s (BAT) divestment in ITC, which was executed around an 8 percent discount to the market price; Rakesh Gangwal’s stake reduction in InterGlobe Aviation (IndiGo), at a 3.5 percent discount; and the Sajjan Jindal Family Trust’s partial exit from JSW Infrastructure, at a 3 percent discount.
Other notable transactions involved Singapore Telecommunications (Singtel) trimming its stake in Bharti Airtel, at a 3.6 percent discount; Wendt GmbH’s exit from Wendt India, where promoters went for an OFS of around 38 percent discount; and stake sales by the promoters of Paras Defence, PG Electroplast, and TD Power Systems, where block deals were executed at approximately 5 percent discount to the market price.
As of March 31, 2025, private promoter shareholding by value in NSE-listed companies fell to 40.81 percent, down from 41.09 percent at the end of December 2024. In value terms, promoter holdings declined by 7 percent quarter on quarter (QoQ) to Rs 166.22 lakh crore, according to Prime Database data.
Elevated market valuations, muted earnings prime reasons
Market experts attribute this trend to a combination of elevated market valuations and muted earnings growth. Many promoters are seizing the opportunity to monetize at favourable price-to-earnings multiples. Some may re-enter later when valuations appear more attractive, while others are raising capital to fund expansion plans through QIPs, OFS, or IPOs.
Akshat Garg, AVP – Research at Choice Wealth, said promoter stake sales, especially around the March quarter, warrant a deeper analysis. “While the headline numbers suggest broad-based exits, the motivations are far more nuanced,” he said. “Many large- and mid-cap promoters are strategically reducing stakes to deleverage, improve corporate governance, or prepare for succession.”
Some analysts say that a growing number of promoter stake sales are also linked to the rise of wealth management and family office platforms in India. Promoters are increasingly diversifying their concentrated equity holdings, reallocating capital into private equity, global assets, real estate, and philanthropic ventures.
However, experts cautioned that not all exits are purely strategic. Stake sales at a discount—especially in sectors grappling with weak earnings visibility—may indicate underlying concerns. In cyclical industries such as chemicals, exports, and discretionary consumption, promoters appear to be proactively managing liquidity risks and insulating themselves from demand-side uncertainties.
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