Shareholdings moves in Q4: Indian Inc's founders hike stakes in select small-cap firms

Mint

14-05-2025

Capitalizing on the weak market sentiment in Q4FY25, promoters increased their holdings in several BSE-listed companies on a sequential basis. A Mint analysis of 3,716 such firms highlights these strategic moves, suggesting promoters consolidated their positions in their beaten-down companies. Roughly 12% of companies saw promoter stake increases in the March quarter, higher than 7.3% in the December quarter.
Biggest increases
Among the most striking examples was Flomic Global Logistics, a logistics and freight management company, where promoters ramped up their stake by over 42 percentage points—from 26.34% in Q3FY25 to 69.17% in Q4FY25. The stock has suffered a drop of 25.6% sequentially.
In the cement sector, India Cements saw a similar show of promoter confidence, with holdings rising by more than 25 percentage points as the stock cracked 26.6% during the quarter. Jonjua Overseas, an IT consulting and solutions firm, also reported a comparable surge in promoter stake—up over 20 percentage points—while the stock declined 19%.
Shriram Asset Management Co., a financial services company, saw promoter shareholding rise by 8.6 percentage points while its stock price declined by more than 26%.
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The only exception among the top five was California Software Co., part of the IT services sector, where both metrics moved upward—its promoter holding rose over 26 percentage points to 62.26%, while the stock gained 11.2% during the quarter.
'Promoters are usually the most informed stakeholders in a company. An increase in their stake often signals confidence in future growth," said Bhavya Shah, head of research at Wallfort PMS. 'However, this should not be the only or dominant indicator driving investment decisions. Investors should look at the company in a holistic way and avoid investment solely based on one indicator."
Trimming stakes
While some promoters used the market dip as a buying opportunity, others went the opposite way, trimming their holdings—possibly due to funding needs, regulatory constraints, or strategic rebalancing.
TTI Enterprise recorded the sharpest drop in promoter ownership, falling from 62.23% to 39.36% in the past two quarters. This was followed by Vodafone Idea, where promoter holding dropped from 38.8% to 25.57% alongside a 14.2% slide in share price.
Ruchi Infrastructure saw its promoter stake dip by 968 basis points while its stock price plunged 44.8%—the steepest price drop among this select group of stocks, where promoter confidence waned. Indiabulls Enterprises also witnessed a 7-percentage-point decline in promoter holding, with shares falling 20.6%.
Only India Steel defied this larger trend: its stock edged up 1.6% during the quarter, while promoter holding fell to 36.83% from 48.5% on a sequential basis.
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Though Shah cautioned against oversimplifying promoter stake movements. 'Reductions in promoter shareholding aren't necessarily negative. They may stem from strategic reasons such as strengthening the balance sheet or regulatory compliance, rather than opportunistic profit-booking," he noted.
'Conversely, while a high promoter stake is often viewed positively, we've seen companies with low promoter holding excel through professional management and robust governance," he added.
Overall trend
Although some companies have experienced a rise in promoter ownership, a wider analysis of India Inc. indicates a persistent downward trajectory in promoter stakes. The aggregate promoter holding across the 3,716 firms analyzed fell to 45.9% in Q4FY25, from 48.94% a year ago. The decline was gradual throughout the year—from 48.84% in Q1 to 47.98% in Q2, and 47.57% in Q3.
This shift likely reflects capital-raising efforts, strategic stake sales, or a move toward more diversified shareholder structures.
Among companies with a market capitalisation above ₹500 crore, promoter buying was spread across varied sectors, including construction, steel, BFSI, auto ancillaries, chemicals, and IT. But analysts say the trend appears more company-specific than indicative of a sector-wide shift.
'Promoter actions this quarter reflect a mix of conviction and caution," Shah said. 'And, as always, the reasons behind stake changes matter more than the numbers themselves."
This is the tenth part of a series of data stories on the latest shareholding pattern. Read previous parts of our shareholding series here.