Promoters amass more wealth

Written by Pradip Kumar Dey | Mumbai | Updated: Feb 27 2009, 05:01am hrs
In a downward market, nearly 10% of private sector companies promoters' wealth increased during the last one year. This has happened probably due to the better performance of these companies, though most of the promoters of these companies increased their stake during the last one year. For example, the promoters of Jindal Steel increased their stake from 1.81 crore on December 31, 2007 to 9.08 crore on December 31, 2008. The promoters of Jagran Prakashan also increased their stake from 3.13 crore to 15.68 crore.

The companies under review excluded public sector units and MNCs. The aggregate market capitalisation of 2,467 companies' promoters decreased by an amount of Rs 10 lakh crore during February 20, 2009 from Rs 17.78 lakh crore as on February 20, 2008, to Rs 7.77 lakh crore as on February 20, 2009. But out of 2,467 companies, 235 companies promoters wealth increased by 58.7% during the same period. DR Dogra, DMD, CARE said, "A choppy market has provided promoters with a good opportunity to increase their holdings in several companies. Taking the benefit of beaten down share prices, they have increased their stakes in the companies through warrant issues, rights issue, open market purchases, etc."

"Many companies, including big corporate houses like Reliance, Tata and Birla have witnessed a hike in promoter holding in the last 2-3 quarters. This demonstrates promoters' confidence in the company and safeguards it from takeover threats. With increased holding, their current market valuation has increased to a certain extent, which had nose-dived due to a huge fall in share price," he added.

Among the 2,467 companies, promoters of Reliance Industries, the highest in terms of market capitalisation, kept the number one rank. Keeping its number one rank, in the process, the promoters of Reliance Industries decreased their wealth by Rs 87,399 crore. Promoters of telecomm major Bharti Airtel were in the second slot, while losing Rs 26,316 crore to its market cap. Promoters of TCS were in the number three spot and the company's promoters value, as measured by the stock market, decreased by Rs 31,939 crore over the year.

Some significant increase on February 20, 2009 took place in pharma and cement stocks. Promoters of Lupin gained Rs 347 crore to its market cap, an increase of 15.6% over its February 20, 2008 level of Rs 2,224 crore. Madras Cement, gaining Rs 527 crore to its market cap during the year.

Not only pharma and cement stocks showed a significant increase but also other companies' promoters like Sterlite Industries showed bullishness, as well as Madras Aluminium, which gained by 223% or Sanwaria Agro, which went up by 111.5%. But a marginal increase in market capitalisation was seen in Cipla, Parry Agro, Amrutanjan Health, PSI data system,Willard India and Glittak Granite.

Out of 2,467 companies, the top five promoters in terms of market capitalisation in descending order in February 20, 2009 are Reliance Inds, Bharti Airtel, TCS, Reliance Petro and Wipro. But as on February 20, 2008, the top five promoters in terms of market capitalisation were Reliance Inds, DLF, Bharti Airtel, Reliance Comm and TCS. Of the top five promoters in February 20,2009, the highest decrease in market capitalisation was recorded by Reliance Petro (-51.8%).