Ownership of private promoters in companies listed on the National Stock Exchange (NSE) touched 44.43% to reach an all-time high in value terms at the end of June this year. Private promoters ownership, which includes marquee business houses like Tata Sons, HDFC, among others, was at 44.25% at the end of March this year, according to Primeinfobase.com. On the flip side, the government of India’s ownership reached an all-time low of 6.36% in the same time period, aided by divestment as well as the muted performance of public sector entities when compared to their private peers.
Private promoters’ ownership has steadily increased in the last 11 years helped by new listings. In value terms, private promoter holding in companies listed on the NSE has jumped to Rs 60.37 lakh crore from Rs 14.51 lakh crore at the end of June 2009. The largest private promoters by value are Tata Sons, Unilever Plc, Housing Development Finance Corporation, Srichakra Commercials LLP, and Bharti Telecom. The value of holding of Tata Sons, which is a promoter in 15 companies listed on NSE, stood at Rs 6.45 lakh crore at the end of the previous quarter.
The increase in private promoter holding value was helped by the strong performance recorded in companies like Reliance Industries, where value of promoter holding increased by Rs 2 lakh crore, followed by TCS, where promoter holding value jumped by Rs 69,000 crore. Yoga Guru Baba Ramdev’s Ruchi Soya’s massive 697% stock price surge helped him increase his holding value by Rs 35,000 crore in the company.
What did private promoters buy and sell?
In the previous quarter Reliance Industries saw the largest private promoter buying, with Mukesh Ambani buying 22.5 crore shares of his company worth over Rs 32,000 crore. The surge in holding could be aided by the mammoth Rights Issue of the oil-to-telecom major. IDFC First Bank’s promoters increased their holding by adding 34 crore shares of the lender worth close to Rs 786 crore in the April-June quarter. Gautam Adani was the third largest buyer, increasing his holding in Adani Ports & SEZ by buying shares worth close to Rs 481 crore.
Although private promoter ownership increased to an all-time high, some big names were seen trimming their stake during the last quarter. Sunil Bharti Mittal’s Bharti Airtel saw promoter holding fall as the number of promoter held shares went down by 15 crores. Uday Kotak was second on the list reducing stake in Kotak Mahindra Bank, as he looked to fall in line with RBI guidelines by reducing stake in the lender. Other companies that saw a drop in private promoter holding included HDFC Life, HDFC AMC, ICICI Lombard General Insurance, SBI Life Insurance, and Yes Bank where promoter holding vanished on account of its restructuring.
The government of India’s holding dropped to an all-time low, despite not selling its stake in any company. Over an 11-year period, the (GOI) holding has been steadily declining, from 22.71% as on June 30, 2009, due to the Government’s divestment programme, not enough new listings as also lackluster performance of many CPSEs relative to their private peers, according to Pranav Haldea, Managing Director, PRIME Database Group. State Bank of India, Coal India, Bank of Baroda, and Power Finance Corporation where the government’s holding value shrank the most.