 "Downtick in promoter stake for capital market firms as employees cash in")
Financial services companies with broking arms have seen a decline in promoter holding. Dilution of existing stake through a fresh issue of shares, mostly to employees, has resulted in this, say company officials.
In Edelweiss, the promoter holding was down in the December quarter to 36.28 per cent from 36.74 per cent earlier. Geojit is down from 64.07 per cent to 63.72 per cent. Motilal Oswal’s is down from 73.76 per cent to 73.42 per cent. JM Financial showed a decline from 68.19 per cent to 66.1 per cent.
Company officials said employees had subscribed to new issues of shares under their respective benefit schemes. The promoters themselves had not sold stake, said spokespersons for Motilal, Geojit and JM. Revenues and profits rose substantially in these companies over the period.
“We have not diluted any stake. The marginal reduction is due to ESOPs (employee stock option plans) being exercised. Further, we don’t have any plans to dilute our stake. On the contrary, given a viable legal option, we would like to increase it,” said a Motilal Oswal spokesperson in an emailed response.
“The decrease of promoters stake in terms of percentage is due to allotment of shares under ESOP schemes to employees during the past three quarters,” said a Geojit spokesperson.
A JM Financial spokesperson said likewise. There had also been conversion of warrants, the person added. Edelweiss' corporate announcements too showed instances of ESOPs being exercised. A spokesperson for Edelweiss clarified its promoters had purchased 13 million shares from the market which did not appear in their holding as on December 31, 2014, on account of the time taken for settlement. The person added promoter holding in Edelweiss had gone up since the December data.
In Edelweiss, the promoter holding was down in the December quarter to 36.28 per cent from 36.74 per cent earlier. Geojit is down from 64.07 per cent to 63.72 per cent. Motilal Oswal’s is down from 73.76 per cent to 73.42 per cent. JM Financial showed a decline from 68.19 per cent to 66.1 per cent.
Company officials said employees had subscribed to new issues of shares under their respective benefit schemes. The promoters themselves had not sold stake, said spokespersons for Motilal, Geojit and JM. Revenues and profits rose substantially in these companies over the period.
“We have not diluted any stake. The marginal reduction is due to ESOPs (employee stock option plans) being exercised. Further, we don’t have any plans to dilute our stake. On the contrary, given a viable legal option, we would like to increase it,” said a Motilal Oswal spokesperson in an emailed response.
“The decrease of promoters stake in terms of percentage is due to allotment of shares under ESOP schemes to employees during the past three quarters,” said a Geojit spokesperson.
A JM Financial spokesperson said likewise. There had also been conversion of warrants, the person added. Edelweiss' corporate announcements too showed instances of ESOPs being exercised. A spokesperson for Edelweiss clarified its promoters had purchased 13 million shares from the market which did not appear in their holding as on December 31, 2014, on account of the time taken for settlement. The person added promoter holding in Edelweiss had gone up since the December data.
Satish Menon, executive director of Geojit, said ESOP action in general tends to pick up for listed companies in a bull market. “During a bear phase, the market price is often less than the price of ESOP conversion and so these lapse. When stock prices run up, employees of listed firms see an opportunity to convert and make profits,” he said.