At a time when overseas investors were accumulating Indian shares in the January-March quarter, promoters of frontline companies were on a selling spree, taking advantage of a rebound in stock prices from their lows of early December 2011.
Promoters of 50-odd companies from the BSE-500 index, including Tata Motors, Tata Consultancy Services (TCS), Mahindra and Mahindra, Housing Development and Infrastructure Limited (HDIL), Unitech and Jaiprakash Associates offloaded shares of their companies in the open market in January-March quarter.
According to shareholding patterns, promoters of 50 companies have sold 147 million shares worth Rs 1,700 crore, based on the average market price of the quarter.
Tata Group firms sold 9.5 million equity shares amounting to Rs 400 crore of frontline group companies, such as TCS, Tata Motors, Titan Industries and Voltas via the open market route.
Tata AIG Life Insurance sold its entire 1.92 million shares in TCS for Rs 226 crore. Tata International, Tata AIG Life Insurance and Tata AIG General Insurance collectively offloaded 7.3 million shares of Tata Motors and 4.96 million shares of Titan Industries during the quarter. Both these stocks touched their all-time highs during the period.
Promoters of troubled gold loan company Manappuram Finance sold around 40 million shares to repay all outstanding public deposits of Manappuram Agro Farms. The company’s founder, V P Nandakumar, sold 4.75 per cent stake to three large private equity funds, including Baring Private Equity and Sequoia, for about Rs 180 crore, exchange data showed.
“Most probably, the promoters are afraid to raise more debts fearing uncertainty of servicing and/or relying on equity to repay costly debt,” CNI Research Head Kishor Ostwal said.
The founders of other debt-ridden companies, such as Unitech, Lanco Infratech, HDIL, United Spirits, GTL and Jaiprakash Power Ventures, also raised funds by reducing their stakes.
Rupert Murdoch-led global media conglomerate News Corp, a promoter entity of Hathway Cable, sold its entire 17.3 per cent stake for Rs 358 crore to two foreign funds.
Meanwhile, foreign institutional investors, which pumped $8.5 billion (Rs 45,385 crore) into Indian equities raised their exposure in two out of three BSE-500 companies, data showed.