Sale of shares by promoters worth approximately Rs.87,000 crore

Ahmedabad: In the middle of 2023, Indian stock market has seen a great recovery. It has been a month full of ups and downs after the bullish cycle that started at the end of March dragged on till mid-July. While retail investors are now the biggest contributors to the market boom, on the other hand, a shocking figure has emerged that promoter sales in Indian listed companies have reached a 6-year high.

In NSE-500 companies, promoters have sold shares worth around Rs 87,000 crore. According to a Kotak Institutional Equities report released on September 28, not only promoters but also private equity or venture capitalist investors have sold a large number of shares this year compared to last year. Heavy selling was witnessed by promoters in the automobile and components, capital goods, electric utilities, IT services and transportation sectors. Insurance and IT services companies had the highest sales.

As far as individual shares are concerned, promoters of Adani Group have sold the most shares. The promoters of Adani Group in this year 2023 Rs. 37,000 crore shares were sold. Adani Group promoters have accounted for around 40 percent of the total shares sold by promoters of listed companies this year. Apart from this, the promoters of Koforge have paid Rs. 11 thousand crore shares, gold Comstar promoters Rs. 5900 crore shares and promoters of Indigo Rs. 5700 crore shares were sold.

According to analysts, promoters did most of the selling due to strategic imperatives such as debt management, while on the other hand, private equity investors took advantage of the rise in share prices. According to a report by Kotak Institutional Equities, promoters of Adani group companies and Vedanta sold shares as a strategy to raise cash to repay debt, while on the other hand, promoters of HDFC Life and CIE India sold shares due to portfolio changes.

The share of local investors increased

Promoters' share in the BAC-200 index fell to 49 percent in June, 2023 due to selling by promoters. In December 2022, this share was 50.3 percent. On the other hand, the share of local investors like mutual funds, banking and financial institutions, retail has increased by 0.90 percent to 23.5 percent. The share of foreign portfolio investors has also increased by 0.26 percent to 22 percent.