Indian promoters break records with multi-billion dollar share sales
These promoter entities have been significantly engaged in selling activities throughout this calendar year, amassing a substantial sum of around $10 billion thus far.
In 2023, Indian promoters successfully offloaded shares valued at approximately Rs 81,000 crore. This figure is almost twice the total of promoter stake sales witnessed in 2022 and an impressive four times the growth compared to the situation back in 2018.
These promoter entities have been significantly engaged in selling activities throughout this calendar year, amassing a substantial sum of around $10 billion thus far. This number is undeniably substantial, especially when we consider that there are still four months left in the current year. Notably, we have already doubled the amount observed in the preceding year.
To provide further context, let's evaluate the total value of promoter entity sales in relation to the average market capitalisation. In 2020, a similar ratio of around 0.3 times was observed. However, it's crucial to recognise that the average market capitalisation itself has nearly doubled between 2020 and 2023.
The reason for this focus is evident in the recent developments of August 2023, wherein promoter entities have collectively sold an impressive $3 billion. These staggering figures are exemplified by notable trades involving companies from the Adani Group, Jindal SW Energy, and IndiGo. In fact, during just the past week, over $1.5 billion worth of promoter selling has been witnessed.
Additional significant trades occurred in August, alongside several smaller transactions ranging from Rs 100 to approximately Rs 500 crore. When combined, the cumulative promoter selling for the month of August stands at an estimated $3 billion.
So, what do these statistics imply? From one perspective, they underscore the depth of the Indian markets. The fact that a substantial $10 billion worth of promoter shares can be sold and still eagerly absorbed indicates the robustness of the Indian market, which is undoubtedly a positive aspect.
However, there is also a flip side to consider. Given that promoters are typically considered to be experts on their own companies, the question arises: Why are they divesting? This leads us to wonder whether the promoters or the investors are making the correct judgement calls.
First Published: Aug 18, 2023 5:33 PM IST
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