Promoters snap up shares as prices slump

Shares are currentlybeing bought in small quantities, but many transactions are taking place, which is expected to pick up further this week

Taking advantage of four-month low levels in the stock market, promoters of many listed firms including those of Tata, Jindal and Videocon groups, are buying their company shares at cheaper valuations.
    
The promoters of Tata Power, HCL Infosystems, Motilal Oswal, Bombay Dyeing, JK Paper, Videocon, India Infoline, JSPL and Adani Power are buying shares from the open market in the past few days.

The shares are mostly being acquired in small quantities, but many such transactions are taking place and the momentum could pick up further this week as the current fiscal will end on March 31, say experts.

Stock portfolios generally witness a churn towards the end of a fiscal year and the shares are mostly being bought this time around due to cheap valuations, they believe.
     
Tata Steel, part of the promoter group of Tata Power, bought over 20 lakh shares in India's largest integrated power company for around Rs 20 crore on March 20.
     
A day prior to that, Ness Wadia ramped up his stake in Wadia group flagship firm Bombay Dyeing with purchase of 40,000 shares for around Rs 37 lakh.
     
On the other hand, Shiv Nadar-led HCL Corporation bought 44.69 lakh shares or about two per cent stake in HCL Infosystems for over Rs 17 crore.

     
The stock exchange data further shows that Motilal Oswal Financial Services' promoter entity, Passionate Investment Management, picked up nearly 1.81 lakh shares for Rs 1.5 crore via open market transactions on March 20-21.
     
During the same days, Videocon's promoter entity, Nippon Investment & Finance Company, bought nearly 1.9 lakh shares of the diversified conglomerate for over Rs 3.5 crore, while India Infoline's Nirmal Jain picked up 46,000 shares of the financial services firm for over Rs 27 lakh.
 
Sluggish markets offer a window of opportunity to promoters to buy shares cheaper and consolidate their holdings in the companies.

     
The transactions come at a time when the BSE 30-stock index, Sensex, has tanked 834.84 points or 4.27 per cent in six trading days to a fresh 4-month low as worries over political uncertainty and issues in Cyprus have kept financial markets on tenterhooks.
     
Market regulator Sebi has a 5 per cent cap on the quantum of shares promoters can acquire in a company through creeping acquisition during the course of a financial year.
     
Among other such transactions, JK Paper's promoter BMF Investments acquired 3.2 lakh shares from open market on March 21 by spending nearly Rs 1 crore.

     
Vinod Adani, part of the promoter group and also brother of Adani Power Chairman Gautam Adani, bought 46 lakh shares of the power entity for over Rs 21.73 crore on March 19.
    
Jindal Steel and Power Ltd (JSPL) Chairman Naveen Jindal also hiked his stake by acquiring around 4.85 lakh shares for Rs 16.89 crore on March 21 and 22.