Flying in the face of insolvency

Several large investors own chunks of shares in the big NPAs marked by RBI for insolvency

Several large investors own chunks of shares in the big non-performing assets marked by the Reserve Bank of India for insolvency. These included foreign portfolio investors, local mutual funds, companies and the odd high net worth individual. An analysis by BS Research Bureau threw up 20 such names across seven of the big 12 companies bound for insolvency. Two of these investments were made in the last quarter. Of the rest, eight have topped up their stake by buying more shares, seven have cut and three did not make any change. A comparison of current market capitalisation of these companies with that at the time these investors first bought the shares showed that investors in Alok Industries, ABG Shipyard and Jyoti Structures were sitting on considerable losses. In Monnet Ispat and Jaypee, investors were sitting on gains, probably riding on recent rally in these stocks, whereas in Electrosteel and Bhushan, it was a mixed bag. Most investors who entered these stocks in 2015 or later, when these had already been beaten down, are better off than those who got in earlier.