Promoters, FIs grab equities in falling mkt

The stock market meltdown gave an opportunity to promoters, foreign institutional investors (FIIs) and financial institutions (FIs) to pick up shares at reasonable prices.

In the first quarter (April-June) of the current fiscal up to June 23, these groups picked up 121 million equity shares.

Data extracted from the Bombay Stock Exchange's (BSE) daily notices show that promoters, FIIs and FIs acquired equity shares in 111 companies through open market purchases in the last three months.

The demand was high in shares of ICICI Bank, Zee Telefilms, Hindustan Composites, Kopran, Mukand, JK Paper, Chambal Fertilisers, Coromandel Fertilisers, Spice Net and Parrys Confectionery.

These players acquired more than two million shares in each of these companies in the first quarter.

They entered the markets to buy in a big way only after the markets started to fall.

The share prices of a majority of the 111 companies are currently 20 per cent lower from their recent highs on the BSE.

In June alone (up to June 23), promoters, FIIs and FIs have bought 28.4 million shares. In April they had purchased 55.1 million shares, while in May they picked up 37.5 million shares.

Harsh C Mariwala, one of the promoters of Marico Industries, bought around one per cent (2.22 lakh equity shares) of the issued equity in the company through market purchases in June.

The promoters of Bajaj Auto "" Rahul Bajaj, Rajiv Bajaj and Madhur Bajaj "" together acquired 40,137 shares, Brij Raj Punj purchased an additional 1.93 lakh shares of Fedders Lloyd Corporation and 78,426 shares of Lloyd Electric and Engineering from the market in June.

Fifty employees of the Oil and Natural Gas Corporation (ONGC) purchased a total of 12,326 shares of the company from the open market. The stock is currently ruling at Rs 630, a 58 per cent discount to its recent high of Rs 995 on the BSE.

The promoters of pharmaceuticals companies such as Ajanta Pharma, Divi's Laboratories, Biocon, Jenburkt Pharmaceuticals, Jubilant Organosys, Lupin and Polar Pharma also increased their holdings through the creeping acquisition route.

The Agarwal family of Ajanta Pharma purchased 51,595 shares of the company from the open markets, while Uttam N Bhuta and others bought 48,000 shares of Jenburkt Pharmaceuticals in June.

HSBC Financial Services acquired seven lakh shares of Elder Pharmaceuticals and 2.8 lakh shares of Kopran in May.

Merrill Lynch Capital Market also purchased 18 lakh shares of Kopran, Aberdeen Asset Management Asia bought 1.46 lakh shares of Godrej Consumer Products and UBS AG purchased 12 shares of Hitachi Home and Life Solutions.

Mukund Dalal of Futura Polyesters, V R Garware and R B Garware of Garware Wall Ropes, Vineet Nayyar of Great Eastern Shipping, Sudha S Shah of Manugraph India and Narender Surana of Surana Telecom are the few others who bought additional shares of the respective companies in the last three months.

Among FIs, the Life Corporation of India purchased 21.93 million shares of ICICI Bank, while the Industrial Development Bank of India acquired 8.12 million shares of Chambal Fertilizers and 12.96 million shares of JK Paper.

The UTIMF bought shares of Geometric Software Solutions and Elgi Equipment during the quarter.