News: Indian company promoters go on buy binge

(TT 03/07/2006) Mumbai - Taking advantage of the bear grip over stocks, promoters are buying shares of their companies from the open market.

Recently, a number of such share purchases from the open markets by promoters and persons acting in concert have been announced on the stock exchanges.

“In a market where the valuations have become attractive all of a sudden, such moves show that promoters are confident about the future growth prospects of the company,” said an analyst from a leading brokerage.

“Another reason is to reduce the chances of hostile takeovers. In mid and small-cap companies, when share prices go down, it becomes easier for third parties to pick up large stakes from open markets and then make an open offer,” he added.

Anil Ambani led the pack making creeping acquisitions. According to the information available with bourses, Ambani along with persons acting in concert have acquired 2.16 per cent in Reliance Energy Ventures and 2.11 per cent in Reliance Communications.

Kirit R. Kanakiya, promoter of BSEL Infrastructure Reality, acquired 1,00,000 shares on June 26, 65,901 on June 27 and 25,000 on June 28, aggregating to 0.32 per cent of the paid-up capital of the company. Following this, his share has gone up to 5.8 per cent.

Polaris Holdings Pvt Ltd, promoter of Polaris Software Lab Ltd, acquired 165,000 shares on June 16, taking its stake to 19.43 per cent. CMD Arun Jain and family members have raised their stake to 4.37 per cent through purchases in the open market.

Pritish Nandy, promoter and director of Pritish Nandy Communications, has also raised his stake to 30.12 per cent. Gautam S. Adani and Rajesh S. Adani, on behalf of Shantilal B. Adani Family Trust, promoters of Adani Exports Limited, acquired 0.37 per cent of the total share capital on June 13.

Sudha Bala Gupta, one of the promoters of Cyber Media (India) Ltd, has acquired 80,000 shares on June 22, increasing her stake to 9.47 per cent.

Rajshree Pathy, CMD of Rajshree Sugars and Chemicals, also increased the stake to 25.74 per cent through open market purchases.