Investors track promoter holding changes in companies closely. An increase in promoter holding, they argue, reflects the promoter’s confidence in the company, and share purchases by promoters often trigger follow-on buying by retail investors and traders.
This week, we look at stocks that have seen the highest increases in promoter holding over the past two years. These companies' promoter holdings also increased QoQ in the past quarter. Out of the 13 Nifty 500 stocks, seven have risen over the same time period while six have beaten the Nifty 50 index.
Godrej Agrovet witnessed its promoter holding rise the most among Nifty 500 companies in the past two years. The other agricultural products company’s promoters increased their holding by 4 percentage points to 74.1% over. However, the stock has fallen 16.3% in the same period. Godrej Industries bought 1.1 crore shares ( or 5.6% stake) in the company, taking its holding to 64.9%.
Over the past two years, promoters of ACC have increased their holding by 2.2 percentage points to 56.6%. Endeavour Trade And Investment bought 2.2% stake (or 40.6 lakh shares) in the cement & cement products company during. The stock rose 34.3%, beating the Nifty 50 index by 8.7 percentage points.
Balrampur Chini Mills saw its promoters increase their holding by 1.2 percentage points to 42.4% over the same period. The sugar stock has risen 123.7%, beating the Nifty 50 by 98.1 percentage points. Vardhman Textiles’s promoter holding also rose 100 bps to 63.9%. Vardhman Holdings bought a 1.1% stake (6.7 crore shares) in the textiles company. The stock has risen 48.3% over the period, beating the Nifty 50 by 22.8 percentage points.
A few other notable stocks in the screener and chart are Chambal Fertilisers Chemicals, JM Financial, Bajaj Holdings and Investment and Bajaj Auto. A Clearly the companies with the largest increase in promoter holding have not necessarily beaten the Nifty 50 index over the past two years. Promoters generally only increase their holding after being sure that the company will have a strong fundamental performance, but industry dynamics can change (as was the case for two-wheeler company Bajaj Auto) hitting share prices.
