Street signs: Insiders ride the market wave, L&T buyback, and more

Troubles in most of the big banks such as ICICI Bank, State Bank of India and Axis Bank may have turned off investors, but they seem to be quite enthusiastic about the prospects of smaller banks

Insiders ride the market wave

Share sales by promoters and insiders are on the rise amid the benchmark indices scaling new highs. Last week, Baring Private Equity and BG Group offloaded shares worth Rs 11 billion each in Hexaware and Mahanagar Gas, respectively. Market observers say the number of block and bulk deal transactions featuring insiders are on the rise. “We have seen the number of insider exits go up. It is probably a sign of the markets getting overheated,” said a broker. In the past two months, the benchmark Sensex has rallied 10 per cent. 

Samie Modak

Funds eye smaller banks

Troubles in most of the big banks such as ICICI Bank, State Bank of India and Axis Bank may have turned off investors, but they seem to be quite enthusiastic about the prospects of some smaller banks. The star of the show, in recent times, has been Bandhan Bank. RBL Bank has also got good investor attention. In the past couple of weeks, RBL Bank has risen sharply from Rs 562 on August 13 to Rs 611 on Friday — a rise of 9 per cent. Fund managers believe that smaller banks look much better in the current circumstances because they are better focused, and seem better bets. "We are placing bets on some of these banks because they do not have the historical baggage unlike much of the larger banks. 

So their books are unlikely to throw up many unpleasant surprises," said an investment advisor.

Joydeep Ghosh

Little play for retail in L&T buyback

Retail investors have made decent gains in recent big-ticket buybacks in companies such as Infosys and Tata Consultancy Services (TCS). The trade includes buying shares of a company following a buyback announcement and tendering them in the buyback programme under the retail quota. The same may not play out in case of Larsen and Toubro (L&T), which last week announced share repurchase programme of Rs 90 billion. Analysts say the retail investor count in L&T is high, which means the acceptance ratio could be about 10 per cent or less. Also, following the sharp run up in the stock, the buyback premium has narrowed to 10 per cent. In other large buybacks, the acceptance ratio has been more than 30 per cent and buyback premium too has been relatively higher.

Samie Modak