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Mint
2 days ago
- Business
- Mint
Promoters stake sales surge almost 7-fold in Q1 as they cash in on high market valuations
Promoters of companies are cashing in their shares on high valuations. The value of promoter holdings in listed companies that were sold in the April-to-June period surged almost sevenfold from the previous quarter as higher market valuations offered them a better price. Shares sold by promoters on the country's top two exchanges increased 6.69 times on a quarterly basis and 1.54 times from a year earlier to ₹2.61 trillion, according to PRIME Database, which cited insider trading disclosures in the first quarter of FY26. The highest-selling promoter was the government, which sold shares worth ₹29,963 crore in ITI Ltd. Among the others, Pastel, a subsidiary of Singapore-based Singtel, sold shares worth ₹12,880 crore in Bharti Airtel, and the Chinkerpoo Family Trust set up by Rakesh Gangwal, co-founder of IndiGo, sold shares worth ₹10,408 crore in InterGlobe Aviation. Promoter stake sales in Vishal Mega Mart and Wipro were among the top five. In the first six months of 2025, promoters have already sold 65% of the stake worth ₹4.61 trillion that they offloaded in 2024. Promoters are seizing the current favourable market conditions to dilute their stakes in companies as valuations are currently significantly higher than their intrinsic worth, said Siddarth Bhamre, head of institutional research at Asit C Mehta Investment Intermediaries Ltd. Many promoters believe that their businesses are valued far above their actual worth and this valuation gap has prompted them to capitalise on the opportunity, resulting in a surge in stake sales, Bhamre added. The Nifty 50's current PE is 22.8x compared with 19.8x on 28 March, while its 12-month forward PE is 19.9x. The index has jumped 8.49% from April 1 to June 30. The PE of InterGlobe Aviation when the stake was sold on 25 May was 28.29x compared with an average of 18.35x in Q1 a year earlier. The PE of Vishal Mega Mart when Samayat Services LLP sold ₹10,221 crore of shares on 18 June was 90.42x compared with an average of 22.81x in the January-March quarter of 2024. Investment avenues Apart from rising valuations, promoters may sell shares to meet minimum public shareholding norms, repay debt or raise funds to invest elsewhere. 'Individual promoters are selling stakes either to deleverage the balance sheet at a personal level or to book profit and diversify into other investment avenues, while continuing to hold a majority stake in the company," said Sunny Agrawal, head of fundamental equity research at SBI Securities. The same promoters may later invest in the business and again increase their stakes through warrants, rights issues, or preferential allotments, he added. Of the ₹2.61 trillion worth of shares sold by promoters, offers-for-sale (OFS) made up ₹8,284 crore, while shares sold in block or bulk deals added up to ₹60,900 crore, as per PRIME Database. OFS, block and bulk deals are a part of the insider trading filings but do not make up all stake sales by promoters. Promoters selling stakes via bulk or block deals increased 64% YoY and 17 times sequentially in Q1. Promoters who sold shares via OFS increased 25 times YoY and 69% sequentially. The markets seem to remain elevated on the back of falling interest rates, which may keep promoter stake sale activity higher in the coming quarters, said Vinit Bolinjker, head of research at Ventura Securities. Agrawal of SBI Securities added that if market sentiment remains buoyant, promoter stake sales will continue. 'The market sentiment looks positive as global uncertainties have receded of late. And a rate cut and tax cut may boost consumption. Plus, private capex is picking up and earnings growth is likely to go back to two-digit numbers in Q2 of FY26," Agrawal added.
Time of India
6 days ago
- Business
- Time of India
Stock market rally under threat! Rs 1 lakh crore shares dumped by promoters, private equity firms & strategic investors; what's happening
Promoters offloaded approximately Rs 61,000 crore in shares, while PE/VC firms exited nearly Rs 28,000 crore. (AI image) Promoters, private equity firms, and other large strategic investors disposed of shares worth over Rs 1 lakh crore within two months, exerting supply-side pressure on India's stock market indices Sensex and Nifty, which pursued new record highs. Promoters offloaded approximately Rs 61,000 crore in shares, while PE/VC firms exited nearly Rs 28,000 crore. Additionally, Reliance Industries sold shares worth Rs 9,580 crore in Asian Paints, alongside various block deals by other strategic investors, bringing the total to over Rs 1 lakh crore, according to data from PRIME Database and the NSE data quoted in an ET report. The share sale trend began in May with several significant transactions. On May 16, Singapore Telecommunications sold Bharti Airtel shares valued at Rs 12,880 crore. Subsequently, on May 27, Rakesh Gangwal, co-founder of IndiGo, sold shares exceeding Rs 11,560 crore as part of a stake reduction in InterGlobe Aviation. The following day, British American Tobacco (BAT) offloaded a 2.5% stake in ITC through its subsidiary for approximately Rs 12,900 crore, marking one of the largest single-day exits recorded. In June, Vishal Mega Mart's promoter sold a 19.6% stake to mutual funds in a bulk deal worth Rs 10,220 crore. Earlier in the month, Bajaj Finserv's promoter offloaded around Rs 5,500 crore worth of shares. These figures are expected to increase with additional block deals in PB Fintech, Mobikwik, Coforge, and Delhivery executed on Thursday. Market dynamics are seeing a dual effect due to supply-side pressures. "Selling by promoters/PE is being witnessed in few stocks and in those companies, in the short term, upside can be capped as most of the demand from institutions have been fulfilled and support in the secondary market is likely to reduce," warned SBI Securities' Sunny Agrawal according to the ET report. The surge in block/bulk deals stems from increased market liquidity, with domestic investors and mutual funds having substantial capital, alongside renewed FII participation, according to PRIME Database MD Pranav Haldea in his discussion with ETMarkets, highlighting the key factors behind the current selling trend. Addressing market dynamics, he offered a balanced perspective on current conditions. "Some promoters and investors have sold because valuations were attractive for them while others have their own strategic reasons. It's not necessarily a sign of a market peak, which no one can predict." Regarding PE/VC exits, Haldea views this as positive market development. The trend of private equity and venture capital firms divesting through IPOs and block deals indicates a more sophisticated capital market structure and increased depth. This pattern aligns with established western markets, enabling these firms to generate returns for investors and secure fresh capital for new investments. Investment experts note that understanding the scale and circumstances of divestment is more crucial than focusing on raw numbers. "Promoter selling isn't inherently bearish; its signal depends on why the shares are being offloaded and what ownership remains afterward," said Arvind Kothari, smallcase manager and Founder of Niveshaay. According to Kothari, there are several legitimate reasons for promoters to reduce holdings: "In many cases, promoters trim stakes to meet minimum-public-shareholding rules, unlock liquidity for estate or philanthropic planning, onboard marquee strategic or long-only investors, optimize taxes near fiscal year-end, or fund expansion in privately held group businesses — none of which imply deteriorating prospects for the listed entity. " Kothari's essential assessment criteria states: "If the promoter still retains a commanding stake, the sale occurs at only a modest discount, and company fundamentals remain intact, the transaction is simply a liquidity event that can broaden free-float and deepen institutional ownership." Warning signs become apparent "when divestments coincide with slipping earnings, heavy pledge unwinds, or a steady slide toward loss of control," he advised. The substantial increase in supply has been effectively managed by institutional buyers who have absorbed the market pressure. "Some supply pressure is inevitable when markets rally — and to an extent, it's healthy. It improves free float and brings price discovery in names that were tightly held," said Mihir Vora, CIO at TRUST Mutual Fund. "In many cases, we've seen these sales met with strong institutional demand, especially from domestic mutual funds and insurers," Vora added, emphasising the significant role of domestic investors who have become crucial market participants. The investment strategy at his fund prioritises understanding motivations: "We look at the intent behind the sale. If promoters are monetizing to invest back into the business, or if PE/VC funds are exiting after long holding periods, it's not a concern. What we avoid are situations where exits are paired with governance red flags or signs of operational stress." The current phase of insider selling in Indian markets presents a significant challenge. The sustainability of this trend depends on whether domestic institutional investors can maintain their absorption capacity whilst foreign investors sustain their renewed interest in Indian equities. This period could indicate either market maturation or signal the zenith of the present upward trend. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Economic Times
6 days ago
- Business
- Economic Times
Rs 1 lakh crore selloff tsunami threatens Nifty rally as promoters, strategic investors exit
A staggering Rs 1 lakh crore worth of shares have been dumped by promoters, private equity firms and other large strategic investors in just two months, creating supply-side pressure as India's stock market indices Sensex and Nifty are once again aiming for new record highs. ADVERTISEMENT Promoters alone have offloaded shares worth about Rs 61,000 crore, while PE/VC firms have exited nearly Rs 28,000 crore. Add to that the Reliance Industries' Rs 9,580 crore offloading in Asian Paints and a smattering of block deals by other strategic investors, and the tally breaches the Rs 1 lakh crore mark, according to data compiled from PRIME Database and the NSE. The exodus began in earnest in May with a series of blockbuster deals. Rakesh Gangwal, co-founder of IndiGo, sold shares worth over Rs 11,560 crore on May 27 in a fresh round of stake trimming in InterGlobe Aviation. A day later, British American Tobacco (BAT) offloaded a 2.5% stake in ITC through its subsidiary for around Rs 12,900 crore in one of the largest single-day exits ever recorded. Singapore Telecommunications wasn't far behind, selling Bharti Airtel shares worth Rs 12,880 crore on May 16. June has maintained a frenzied pace. Vishal Mega Mart's promoter sold a 19.6% stake to mutual funds in a Rs 10,220 crore bulk deal, while Bajaj Finserv's promoter offloaded approximately Rs 5,500 crore worth of shares earlier in the month. The figures will surge higher when accounting for block deals in PB Fintech, Mobikwik, Coforge and Delhivery executed on Thursday. The supply pressure is creating a bifurcated impact across the market. "Selling by promoters/PE is being witnessed in few stocks and in those companies, in the short term, upside can be capped as most of the demand from institutions have been fulfilled and support in the secondary market is likely to reduce," warned SBI Securities' Sunny Agrawal. ADVERTISEMENT Also Read | Promoter, PE & VC selling crosses Rs 40,000 crore in 2 weeks: Red flag for Nifty bulls? "Block/bulk deals are happening as domestic investors and mutual funds are flush with money and now FIIs too have come back which has resulted in greater liquidity in the market," PRIME Database MD Pranav Haldea told ETMarkets, noting the confluence of factors driving the selling spree. ADVERTISEMENT The veteran market observer struck a measured tone on whether this represents a market peak. "Some promoters and investors have sold because valuations were attractive for them while others have their own strategic reasons. It's not necessarily a sign of a market peak, which no one can predict."Haldea sees the PE/VC exodus as a sign of maturation rather than distress. "PE/VC selling through IPOs and then further through blocks is a sign of maturing of the capital market ecosystem and a deepening of the market. This is similar to what we find in the western markets as well. Through such exits, they are able to return money to their investors and then raise money to invest in the next set of companies." ADVERTISEMENT Market veterans emphasize that the quantum and context of selling matters more than the absolute numbers. "Promoter selling isn't inherently bearish; its signal depends on why the shares are being offloaded and what ownership remains afterward," said Arvind Kothari, smallcase manager and Founder of outlined multiple benign reasons for promoter exits: "In many cases, promoters trim stakes to meet minimum-public-shareholding rules, unlock liquidity for estate or philanthropic planning, onboard marquee strategic or long-only investors, optimize taxes near fiscal year-end, or fund expansion in privately held group businesses — none of which imply deteriorating prospects for the listed entity." ADVERTISEMENT The key litmus test, according to Kothari: "If the promoter still retains a commanding stake, the sale occurs at only a modest discount, and company fundamentals remain intact, the transaction is simply a liquidity event that can broaden free-float and deepen institutional ownership."Red flags only emerge "when divestments coincide with slipping earnings, heavy pledge unwinds, or a steady slide toward loss of control," he the supply deluge, institutional demand has largely absorbed the selling pressure. "Some supply pressure is inevitable when markets rally — and to an extent, it's healthy. It improves free float and brings price discovery in names that were tightly held," said Mihir Vora, CIO at TRUST Mutual Fund."In many cases, we've seen these sales met with strong institutional demand, especially from domestic mutual funds and insurers," Vora added, highlighting the robust domestic investor base that has emerged as the market's fund's approach focuses on intent: "We look at the intent behind the sale. If promoters are monetizing to invest back into the business, or if PE/VC funds are exiting after long holding periods, it's not a concern. What we avoid are situations where exits are paired with governance red flags or signs of operational stress."As Indian markets navigate this wave of insider selling, the ultimate test will be whether domestic institutional investors can continue absorbing the supply while foreign investors maintain their renewed interest in Indian equities. The answer may well determine whether this selling spree marks the peak of the current rally or simply the growing pains of a maturing market ecosystem. (Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Time of India
6 days ago
- Business
- Time of India
Rs 1 lakh crore selloff tsunami threatens Nifty rally as promoters, strategic investors exit
A staggering Rs 1 lakh crore worth of shares have been dumped by promoters, private equity firms and other large strategic investors in just two months, creating supply-side pressure as India's stock market indices Sensex and Nifty are once again aiming for new record highs. Promoters alone have offloaded shares worth about Rs 61,000 crore, while PE/VC firms have exited nearly Rs 28,000 crore. Add to that the Reliance Industries ' Rs 9,580 crore offloading in Asian Paints and a smattering of block deals by other strategic investors, and the tally breaches the Rs 1 lakh crore mark, according to data compiled from PRIME Database and the NSE. The exodus began in earnest in May with a series of blockbuster deals. Rakesh Gangwal , co-founder of IndiGo , sold shares worth over Rs 11,560 crore on May 27 in a fresh round of stake trimming in InterGlobe Aviation. A day later, British American Tobacco (BAT) offloaded a 2.5% stake in ITC through its subsidiary for around Rs 12,900 crore in one of the largest single-day exits ever recorded. Singapore Telecommunications wasn't far behind, selling Bharti Airtel shares worth Rs 12,880 crore on May 16. June has maintained a frenzied pace. Vishal Mega Mart 's promoter sold a 19.6% stake to mutual funds in a Rs 10,220 crore bulk deal, while Bajaj Finserv 's promoter offloaded approximately Rs 5,500 crore worth of shares earlier in the month. The figures will surge higher when accounting for block deals in PB Fintech, Mobikwik, Coforge and Delhivery executed on Thursday. Live Events The supply pressure is creating a bifurcated impact across the market. "Selling by promoters/PE is being witnessed in few stocks and in those companies, in the short term, upside can be capped as most of the demand from institutions have been fulfilled and support in the secondary market is likely to reduce," warned SBI Securities' Sunny Agrawal. Also Read | Promoter, PE & VC selling crosses Rs 40,000 crore in 2 weeks: Red flag for Nifty bulls? Why are promoters selling? "Block/bulk deals are happening as domestic investors and mutual funds are flush with money and now FIIs too have come back which has resulted in greater liquidity in the market," PRIME Database MD Pranav Haldea told ETMarkets, noting the confluence of factors driving the selling spree. The veteran market observer struck a measured tone on whether this represents a market peak. "Some promoters and investors have sold because valuations were attractive for them while others have their own strategic reasons. It's not necessarily a sign of a market peak, which no one can predict." Haldea sees the PE/VC exodus as a sign of maturation rather than distress. "PE/VC selling through IPOs and then further through blocks is a sign of maturing of the capital market ecosystem and a deepening of the market. This is similar to what we find in the western markets as well. Through such exits, they are able to return money to their investors and then raise money to invest in the next set of companies." Context is King Market veterans emphasize that the quantum and context of selling matters more than the absolute numbers. "Promoter selling isn't inherently bearish; its signal depends on why the shares are being offloaded and what ownership remains afterward," said Arvind Kothari, smallcase manager and Founder of Niveshaay. Kothari outlined multiple benign reasons for promoter exits: "In many cases, promoters trim stakes to meet minimum-public-shareholding rules, unlock liquidity for estate or philanthropic planning, onboard marquee strategic or long-only investors, optimize taxes near fiscal year-end, or fund expansion in privately held group businesses — none of which imply deteriorating prospects for the listed entity." The key litmus test, according to Kothari: "If the promoter still retains a commanding stake, the sale occurs at only a modest discount, and company fundamentals remain intact, the transaction is simply a liquidity event that can broaden free-float and deepen institutional ownership." Red flags only emerge "when divestments coincide with slipping earnings, heavy pledge unwinds, or a steady slide toward loss of control," he cautioned. Institutional Appetite Remains Strong Despite the supply deluge, institutional demand has largely absorbed the selling pressure. "Some supply pressure is inevitable when markets rally — and to an extent, it's healthy. It improves free float and brings price discovery in names that were tightly held," said Mihir Vora, CIO at TRUST Mutual Fund. "In many cases, we've seen these sales met with strong institutional demand, especially from domestic mutual funds and insurers," Vora added, highlighting the robust domestic investor base that has emerged as the market's backbone. His fund's approach focuses on intent: "We look at the intent behind the sale. If promoters are monetizing to invest back into the business, or if PE/VC funds are exiting after long holding periods, it's not a concern. What we avoid are situations where exits are paired with governance red flags or signs of operational stress." As Indian markets navigate this wave of insider selling, the ultimate test will be whether domestic institutional investors can continue absorbing the supply while foreign investors maintain their renewed interest in Indian equities. The answer may well determine whether this selling spree marks the peak of the current rally or simply the growing pains of a maturing market ecosystem. ( Disclaimer : Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Economic Times
13-06-2025
- Business
- Economic Times
IndiGo shares plunge 6% as promoter plans $1 billion stake sale
Shares of InterGlobe Aviation, which operates IndiGo, dropped nearly 6% to Rs 5,175 on Friday after reports suggested promoter InterGlobe Enterprises may sell around 4% stake via block deals. ADVERTISEMENT Sources told CNBC-TV18 that the promoter group is looking to raise about $1 billion through the sale. InterGlobe Enterprises currently holds a 35.70% stake in the company. The move follows ongoing stake reductions by co-promoter Rakesh Gangwal, who has sold shares worth Rs 40,000 crore since 2022. Gangwal now holds just 7.8% in the airline. IndiGo declined to comment on the development. 'We won't comment on the query,' the airline told of IndiGo had hit a 52-week high of Rs 5,474 earlier this week, supported by strong Q4 earnings and bullish commentary on international capacity expansion. However, Friday's slide reflects investor caution amid the overhang of large promoter offloading. Also Read: Why stock market is falling today? 4 key factors behind Sensex's 1,100-point crash, Nifty below 24,650 ADVERTISEMENT Meanwhile, investor caution also deepened after an Air India Boeing 787-8 Dreamliner crashed shortly after takeoff from Ahmedabad en route to London, killing all 241 onboard. Preliminary visuals showed the aircraft losing altitude and crashing into a residential area. The cause is under geopolitical tensions added further pressure. Israel launched strikes on Tehran, targeting nuclear and missile facilities in what it called a 'preemptive strike.' Iran confirmed the death of a top Revolutionary Guards commander, and Israel declared a state of emergency fearing retaliation. U.S. Secretary of State Marco Rubio termed the strike a "unilateral action," saying the U.S. was not involved. ADVERTISEMENT The conflict pushed Brent crude up nearly 10% intraday to $78.50 a barrel — its highest level since January — and up 12% for the week. WTI also surged over 9% to $74.47. 'This could have deep economic consequences if tensions escalate further,' said Dr. V K Vijayakumar of Geojit Financial Services. 'A retaliatory move like blocking the Strait of Hormuz could squeeze global supply and lift oil prices even higher.' ADVERTISEMENT With aviation fuel making up a significant share of airline costs, the crude spike amplified concerns over margins, adding to the sector's selloff. Also Read: SBI, Bank of Baroda among 10 banks that saw NPA decline in Q4 (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
