Market fall: Promoters make hay

Promoters of mid- and small-cap companies are grabbing the opportunity provided by a falling market to raise their holdings in their respective companies.

In most cases, the shares of their companies are trading at over 30 per cent discount to the all-time high market prices.

Consider this. Promoters of 54 small- and mid-size firms acquired 8.3 million equity shares of their companies from the secondary market, between January 10 and February 27 this year.

The Bombay Stock Exchange (BSE) mid- and small-cap index declined more than 25 per cent from its all-time high levels as compared to the 20 per cent fall in the Sensex during the period.

Taking advantage of this opportunity, Sameer Gehlaut and Rajiv Rattan of Indiabulls Financial Services, Rameshchandra Mansukhani of Man Industries, Gracias Saldanha and Blanche Saldanha of Glenmark Pharmaceuticals and Bharat Sheth of Great Eastern Shipping acquired their company's shares through open market purchases.

Indiabulls Financial Services' promoters, Sameer Gehlaut and Rajiv Rattan, purchased 1.8 million and 900,000 equity shares, respectively from the secondary market on February 8.

The stock fell by 35 per cent from its all-time high of Rs 1,005.25 on December 27, 2007 to Rs 649.95 on February 8. Gehlaut increased his stake by 0.71 per cent from 13.48 per cent to 14.19 per cent, while Rattan raised his holding by 0.35 to 7.19 per cent before acquisition. 

Gracias and Blanche Saldanha, the two promoters of Glenmark Pharmaceuticals, purchased a combined 31,000 equity shares of the company between January 22 and January 28. The stock fell by 23 per cent from Rs 573.20 on January 17 to Rs 440.80 on January 22.

Rameshchandra Mansukhani, promoter of Man Industries, bought 1.09 per cent (578,000) equity shares of the company between February 11 and February 14, after the stock fell by more than 40 per cent from Rs 170.85 on January 2 to Rs 96.75 on February 13.      

Nirmal Kotecha of Pyramid Saimira Theatre, K R Thakur of Jyoti Structures, Analjit Singh of Max India, A N Singh of Celestial Labs, Manakchand Jain of Clarus Finance and Nikhil Nanda of JHS Svendgaard are the other mid- and small-cap company promoters to have acquired their company's shares over the last one-and-a-half months.