Promoters are continuing to cash in on the rally in mid-cap and small-cap indices, with shares worth a total of Rs 14,663 crore being sold since July till date.Data shows that out of the 124 companies in which promoters decided to offload stakes, only three were large-caps — namely DLF, Info Edge and Pidilite Industries. All the rest comprised names from the mid-cap and small-cap segments.And for good reason. Since July, the BSE’s mid- and small-cap indices have registered gains of 13% and 16%, respectively. In comparison, the benchmark Sensex rose just 4.8% till September 15. According to data, only three companies saw deals in excess of Rs 1,000 crore. Promoters of Coforge, Hulst BV (owned by Barings Private Equity Asia), was the major contributor as it sold its entire stake worth Rs 7,684 crore, followed by Rail Vikas Nigam and DLF promoters who sold shares worth Rs 1,367 crore and Rs 1,083 crore, respectively. The amount raised by promoters in this quarter is even more than the trend witnessed in the April-June quarter, during which promoters of 148 companies offloaded shares worth Rs 13,100 crore.
The top five firms that sold stake in that quarter were R Systems International, Coforge, TD Power Systems, and Easy Trip Planners. Between April and June, the mid-cap index rose 19.5% and small-cap index jumped 21%, compared to a 9.7% increase in the Sensex.In FY24 so far, the Sensex has returned 15%. In comparison, the BSE MidCap and SmallCap indices have returned 35% and 40%, respectively.
He pointed out that the momentum might just continue, and there could be a further rally before a major fall. Further, promoters are selling just part of their stake, which is unlikely to cause much jitter among investors. “We have seen earnings upgrades across the spectrum. While there has been a fast run-up in some pockets, which could lead to course correction in the forthcoming weeks or months, the market is structurally quite sound. The macro setup is strong and expected to remain strong for the next few years,” said Pankaj Pandey, head of research at ICICI Direct.He added that while a notable correction could be witnessed at some point, or individual stocks overshooting and then seeing a crash, there is no major cause for any worry in the markets.While selling has been rising on a quarterly basis, there was no substantial deal involving promoters buying their companies’ shares in this quarter. There were 106 companies in which promoters bought their own shares, totalling, just Rs 865 crore. However, only three firms saw shares of over Rs 100 crore being bought by promoters, with two being Adani group entities.However, Adani group firms share prices have been under pressure since the beginning of the year. This might have prompted promoters to do so.