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Economic Times
18-06-2025
- Business
- Economic Times
Promoter, PE & VC selling crosses Rs 40,000 crore in 2 weeks: Red flag for Nifty bulls?
Raising eyebrows about stretched valuations and supply overhangs in a soaring market, massive selling by promoters, private equity and venture capital investors has crossed Rs 40,000 crore in June so far as they continue to dump stakes at breakneck pace. ADVERTISEMENT Driven by daily large block and bulk deals, the massive selling spree is set to surpass last month's Rs 43,000 crore selling total, with heavyweight transactions dominating the landscape. On Tuesday alone, Vishal Mega Mart's promoter sold a 19.6% stake to mutual funds in a Rs 10,220 crore bulk deal, while Bajaj Finserv's promoter offloaded approximately Rs 5,500 crore worth of shares earlier in the month, according to Prime Database and NSE. The selling frenzy includes some of the market's most prominent names. Walmart-owned Flipkart divested its entire 6% stake in Aditya Birla Fashion & Retail (ABFRL) through a Rs 588 crore bulk deal, while Reliance Industries' Rs 9,580 crore stake sale in Asian Paints added substantial weight to the two-week tally. Other companies witnessing promoter stake sales include Alkem Laboratories, Jubilant Foodworks, Azad Engineering, Suzlon Energy, and Kaynes Technology India. The breakdown shows promoter selling of Rs 23,820 crore, alongside PE/VC divestments worth Rs 8,500 crore in the first fortnight of June. If you add RIL's stake sale of Rs 9,580 crore, the total adds up to Rs 41,900 crore. ADVERTISEMENT Also Read | Rs 43,000 crore selloff by promoters! Insider exits flash warning sign for Nifty bulls Capital Migration Pattern Emerges "Where is this capital flowing? Evidence points to real estate and alternative investments like Portfolio Management Services (PMS) and Category II/III Alternative Investment Funds (AIFs)," Akshay Badjate, Fund Manager at Merisis PMS, told ET Markets. ADVERTISEMENT Latest SEBI data reveals Category II AIFs, including real estate and private equity funds, managing ₹13.58 lakh crore as of March 2025, up from ₹9.54 lakh crore in September 2023—a 42% surge. Category III AIFs focused on listed equities and derivatives grew 58% year-on-year to ₹2.3 trillion by March 2025."Over the last two years (June 2023–June 2025), insider selling has coincided with ₹5.5 lakh crore in combined Category II/III AIF and PMS inflows, with real estate absorbing nearly ₹74,000 crore by December 2024," Badjate adds. ADVERTISEMENT Also Read | Mukesh Ambani's masterstroke: Rs 500 crore bet delivers Rs 9,000 crore windfall gain for Reliance Industries Despite the selling pressure, domestic institutional investors have provided crucial support. DIIs have been net buyers with purchases exceeding ₹49,000 crore in June, while foreign institutional investors turned net sellers, offloading nearly ₹7,000 crore worth of equities.'While the increased supply from promoter and PE/VC selling indeed creates a supply overhang, the substantial domestic inflows, particularly from mutual funds, insurance companies, and pension funds, have, to date, cushioned the market and prevented any sharp correction. However, this rising supply could potentially cap upside potential in the near term, especially if global volatility persists or domestic flows begin to slow down,' says Mayank Jain, Market Analyst, ADVERTISEMENT Sunny Agrawal, DVP and Fundamental Research Analyst at SBI Securities, argues that promoter selling isn't necessarily a red flag as many PE funds are bound to return money to their investors and have limited duration for which they can remain invested. Hence, they are bound to book profit at an opportune time, he said."Regarding promoter selling, many times they too sell the equity in the company to meet personal requirements and hence cant be a red flag always. Hence, inference can vary on case to case basis," Agrawal concerns about stretched valuations persist. "The heavy insider selling is not a definitive signal of a market peak but underscores valid concerns about current unsustainable valuations, particularly in several pockets of the small- and mid-cap segments," warns Nifty Midcap 150 declined 1.5% in June, reflecting selective pressure on broader market segments."Selling by promoters/PE is being witnessed in few stocks and in those companies, in the short term, upside can be capped as most of the demand from institutions have been fulfilled," says Agrawal."From the overall equity market perspective, cap on upside is likely to be limited, as the market has become narrow and investors are chasing select companies which have robust earnings growth outlook in the current uncertain business environment."At Merisis PMS, "one of the key parameters to screen viable investment opportunities is to look for Companies where promoter / insider holding remains steady in spite of strong recent price performance or is in fact on the rise, as it reflects the promoter's internal optimism around his business prospects for the foreseeable future," states Jain observes that "large investor selling, particularly during periods of high valuations, serves as a signal that warrants caution rather than an outright red flag."'It reflects a combination of strategic portfolio decisions and an attempt to capitalize on favorable market conditions. Investors should closely monitor whether domestic inflows continue to offset the increased supply and remain alert for any signs of weakening market fundamentals or a sharp reversal in sentiment. In this environment, it is prudent for investors to focus on companies with strong fundamentals and robust growth prospects,' he Sensex, Nifty eye fresh record highs, the key question remains whether robust domestic inflows can continue absorbing this unprecedented supply pressure. (Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
18-06-2025
- Business
- Time of India
Promoter, PE & VC selling crosses Rs 40,000 crore in 2 weeks: Red flag for Nifty bulls?
Raising eyebrows about stretched valuations and supply overhangs in a soaring market, massive selling by promoters, private equity and venture capital investors has crossed Rs 40,000 crore in June so far as they continue to dump stakes at breakneck pace. Driven by daily large block and bulk deals, the massive selling spree is set to surpass last month's Rs 43,000 crore selling total, with heavyweight transactions dominating the landscape. On Tuesday alone, Vishal Mega Mart's promoter sold a 19.6% stake to mutual funds in a Rs 10,220 crore bulk deal, while Bajaj Finserv's promoter offloaded approximately Rs 5,500 crore worth of shares earlier in the month, according to Prime Database and NSE. The selling frenzy includes some of the market's most prominent names. Walmart-owned Flipkart divested its entire 6% stake in Aditya Birla Fashion & Retail (ABFRL) through a Rs 588 crore bulk deal, while Reliance Industries' Rs 9,580 crore stake sale in Asian Paints added substantial weight to the two-week tally. Other companies witnessing promoter stake sales include Alkem Laboratories, Jubilant Foodworks, Azad Engineering, Suzlon Energy, and Kaynes Technology India. Live Events The breakdown shows promoter selling of Rs 23,820 crore, alongside PE/VC divestments worth Rs 8,500 crore in the first fortnight of June. If you add RIL's stake sale of Rs 9,580 crore, the total adds up to Rs 41,900 crore. Also Read | Rs 43,000 crore selloff by promoters! Insider exits flash warning sign for Nifty bulls Capital Migration Pattern Emerges "Where is this capital flowing? Evidence points to real estate and alternative investments like Portfolio Management Services (PMS) and Category II/III Alternative Investment Funds (AIFs)," Akshay Badjate, Fund Manager at Merisis PMS, told ET Markets. Latest SEBI data reveals Category II AIFs, including real estate and private equity funds, managing ₹13.58 lakh crore as of March 2025, up from ₹9.54 lakh crore in September 2023—a 42% surge. Category III AIFs focused on listed equities and derivatives grew 58% year-on-year to ₹2.3 trillion by March 2025. "Over the last two years (June 2023–June 2025), insider selling has coincided with ₹5.5 lakh crore in combined Category II/III AIF and PMS inflows, with real estate absorbing nearly ₹74,000 crore by December 2024," Badjate adds. Also Read | Mukesh Ambani's masterstroke: Rs 500 crore bet delivers Rs 9,000 crore windfall gain for Reliance Industries Market Resilience Despite Supply Overhang Despite the selling pressure, domestic institutional investors have provided crucial support. DIIs have been net buyers with purchases exceeding ₹49,000 crore in June, while foreign institutional investors turned net sellers, offloading nearly ₹7,000 crore worth of equities. 'While the increased supply from promoter and PE/VC selling indeed creates a supply overhang, the substantial domestic inflows, particularly from mutual funds, insurance companies, and pension funds, have, to date, cushioned the market and prevented any sharp correction. However, this rising supply could potentially cap upside potential in the near term, especially if global volatility persists or domestic flows begin to slow down,' says Mayank Jain, Market Analyst, Strategic Exits, Not Panic Selling Sunny Agrawal, DVP and Fundamental Research Analyst at SBI Securities, argues that promoter selling isn't necessarily a red flag as many PE funds are bound to return money to their investors and have limited duration for which they can remain invested. Hence, they are bound to book profit at an opportune time, he said. "Regarding promoter selling, many times they too sell the equity in the company to meet personal requirements and hence cant be a red flag always. Hence, inference can vary on case to case basis," Agrawal adds. Valuation Concerns Mount However, concerns about stretched valuations persist. "The heavy insider selling is not a definitive signal of a market peak but underscores valid concerns about current unsustainable valuations, particularly in several pockets of the small- and mid-cap segments," warns Badjate. The Nifty Midcap 150 declined 1.5% in June, reflecting selective pressure on broader market segments. "Selling by promoters/PE is being witnessed in few stocks and in those companies, in the short term, upside can be capped as most of the demand from institutions have been fulfilled," says Agrawal. "From the overall equity market perspective, cap on upside is likely to be limited, as the market has become narrow and investors are chasing select companies which have robust earnings growth outlook in the current uncertain business environment." Investment Strategy Implications At Merisis PMS, "one of the key parameters to screen viable investment opportunities is to look for Companies where promoter / insider holding remains steady in spite of strong recent price performance or is in fact on the rise, as it reflects the promoter's internal optimism around his business prospects for the foreseeable future," states Badjate. Jain observes that "large investor selling, particularly during periods of high valuations, serves as a signal that warrants caution rather than an outright red flag." 'It reflects a combination of strategic portfolio decisions and an attempt to capitalize on favorable market conditions. Investors should closely monitor whether domestic inflows continue to offset the increased supply and remain alert for any signs of weakening market fundamentals or a sharp reversal in sentiment. In this environment, it is prudent for investors to focus on companies with strong fundamentals and robust growth prospects,' he explained. As Sensex, Nifty eye fresh record highs, the key question remains whether robust domestic inflows can continue absorbing this unprecedented supply pressure. ( Disclaimer : Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times) ETMarkets WhatsApp channel )
Time of India
06-06-2025
- Business
- Time of India
Netgear acquires Bengaluru-based cybersecurity startup Exium
US-headquartered networking solutions company Netgear on Friday announced that it has acquired Exium, a cybersecurity startup based in Bengaluru, to provide integrated services for managed service providers (MSPs) and their customers. CEO Farooq Khan will continue to lead the Exium team and will join the Netgear leadership. "Exium is a small team based in Bengaluru. The purpose of acquiring this startup was to have integrated solutions for small and medium enterprises ," Pramod Badjate , president and general manager of Netgear for Business products, told ET. The startup has a secure access service edge (SASE) platform, a security solution deployed in multiple universities across India. This comes a month after Netgear acquired Chennai-based VAAG Systems to boost its in-sourcing of software development capabilities. The acquired company's executive team, research and development (R&D) specialists and engineers are to subsequently join Netgear and drive its software development centre in Chennai. Badjate said the company will hire more than 100 engineers to bulk up its teams over the next 12-18 months. These include its team at the new centre in Chennai and the Exium team. He said Netgear may also broaden its footprint in Bengaluru. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories Netgear specifically targets small and medium enterprises (SMEs). "If you're a small or medium enterprise with less than 500 employees and no IT department, you need wifi and routing etc. but that is not enough; you need security as well," Badjate said. The company is also using AI and cloud technologies to automate network setup, troubleshooting and security, helping SMEs scale faster and enhance productivity. "With AI, there will be a huge improvement in productivity. So, software engineers will not be relevant in the same way as they were before. A lot of the grunt work will be automated, but creative work on how to use AI will be around for a long time," he said. Founded in 1996, Netgear is a Nasdaq-listed company valued at $868 million. In the quarter ended March 2025, it reported a net revenue of $162.1 million, down 1.5% from a year ago. The company had announced in May last year that it was exploring the possibility of establishing manufacturing facilities in India. Badjate said no timeline is fixed, but an announcement regarding this can be expected in the coming months.
Economic Times
29-05-2025
- Business
- Economic Times
Smallcap mania is back. But do Q4 earnings really justify the multibagger hype?
A blistering rally in smallcap stocks is reigniting investor dreams of overnight riches but the numbers are telling a far more complicated story. With the BSE Smallcap Index up nearly 10% in one month, retail participation is surging, echoing the speculative fervor of the last bull market that climaxed in September 2024. And the excitement isn't just index-level: in the last one month, a staggering 69 smallcap stocks have delivered over 30% returns. Among the biggest gainers, Suven Life Sciences surged 83%, while GRSE, Timex, IFCI, Nelcast, and HLE Glascoat all rallied at least 50%. ADVERTISEMENT But while prices soar, fundamentals remain shaky and earnings aren't keeping pace with the hype. 'Indian smallcaps and midcaps seem to have outperformed largecaps in Q4 FY25, but the numbers tell a different story,' said Akshay Badjate, Fund Manager at Merisis PMS. 'Our analysis of the top 750 listed companies shows smallcaps lagging in profit growth, with a median PBT growth of just 4% compared to 11% for the top 250 largecaps. Many smallcaps even posted flat or negative growth, undermining the narrative of a broad-based rally.' Despite the tepid performance on the bottom line, investor appetite has remained insatiable. The Nifty Smallcap 250 has rallied 9% in the last two months, triple the 3% rise seen in the Nifty 50. Badjate attributes this surge to 'liquidity, retail enthusiasm, and domestic growth optimism,' but warns that the disconnect between price and performance may not be sustainable.'Our view at Merisis Advisors is cautious,' he said. 'While select smallcaps with strong fundamentals remain appealing, the segment risks a correction if earnings don't align with valuations. We're trimming smallcap exposure and leaning into largecaps and large midcaps, where we see better operational momentum and value.' Also read | Rs 7 lakh crore boom in just 10 days! Is the smallcap stocks party getting out of hand? ADVERTISEMENT Q4 did deliver a few bright spots for the broader market. 'The Nifty Midcap 150 reported 15% YoY profit growth and the Smallcap 250 delivered 12%. Margin performance was largely stable in midcaps, though smallcaps saw some pressure,' said Krishna Appala, Fund Manager at Capitalmind Appala also flagged that the earnings catch-up story has its limits. 'Valuations remain stretched — midcaps trade at 34x and smallcaps at 32x trailing earnings, well above the 22x seen in largecaps. The divergence between earnings and valuations in the broader market calls for greater selectivity.' ADVERTISEMENT He further added that while largecaps may appear sluggish, they now offer a better risk-reward profile. 'Despite the sharp upmove recently, largecaps currently offer a better balance of earnings visibility and valuation comfort on a forward-looking basis. The environment today rewards fundamentals and discipline over broad-based exposure — especially when mid and smallcap multiples leave little room for error.'Still, not all fund managers are ready to write off smallcaps just yet. Vaibhav Chugh, Director and Head of Sales at Whiteoak Capital AMC, sees rich opportunity in the chaos — provided investors pick wisely. ADVERTISEMENT 'Yes, the result season started slow but as it progressed, midcaps and smallcaps have surprised on growth trajectory as well as upgrades to downgrades statistics,' Chugh said. 'We continue to be overweight small caps. We find relatively high alpha opportunities due to the heterogeneity of business models, sectors and sub-sectors in the smallcap space — which is the ideal setup for bottom-up stock pickers.' With nearly 70 smallcap names delivering eye-popping returns in a matter of weeks, the lure of the next multibagger is proving hard to resist. But experts caution that investors need to tread carefully — the fundamentals are not as broad-based as the rally suggests, and elevated valuations leave little room for disappointment. The smallcap story is far from over, but chasing momentum without earnings to back it could lead to painful lessons. Also read | Sensex soars 10,000 points from April lows. But India Inc's Q4 numbers expose cracks in market rally (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Time of India
29-05-2025
- Business
- Time of India
Smallcap mania is back. But do Q4 earnings really justify the multibagger hype?
A smallcap rally is exciting investors, with the BSE Smallcap Index rising nearly 10% in a month and many stocks delivering over 30% returns. However, earnings growth lags behind, with smallcaps showing lower profit growth compared to largecaps. Experts advise caution, suggesting a focus on fundamentals and a potential shift towards largecaps due to stretched valuations in the smallcap segment. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads A blistering rally in smallcap stocks is reigniting investor dreams of overnight riches but the numbers are telling a far more complicated story. With the BSE Smallcap Index up nearly 10% in one month, retail participation is surging, echoing the speculative fervor of the last bull market that climaxed in September 2024. And the excitement isn't just index-level: in the last one month, a staggering 69 smallcap stocks have delivered over 30% returns. Among the biggest gainers, Suven Life Sciences surged 83%, while GRSE Nelcast , and HLE Glascoat all rallied at least 50%.But while prices soar, fundamentals remain shaky and earnings aren't keeping pace with the hype.'Indian smallcaps and midcaps seem to have outperformed largecaps in Q4 FY25, but the numbers tell a different story,' said Akshay Badjate, Fund Manager at Merisis PMS. 'Our analysis of the top 750 listed companies shows smallcaps lagging in profit growth, with a median PBT growth of just 4% compared to 11% for the top 250 largecaps. Many smallcaps even posted flat or negative growth, undermining the narrative of a broad-based rally.'Despite the tepid performance on the bottom line, investor appetite has remained insatiable. The Nifty Smallcap 250 has rallied 9% in the last two months, triple the 3% rise seen in the Nifty 50. Badjate attributes this surge to 'liquidity, retail enthusiasm, and domestic growth optimism,' but warns that the disconnect between price and performance may not be sustainable.'Our view at Merisis Advisors is cautious,' he said. 'While select smallcaps with strong fundamentals remain appealing, the segment risks a correction if earnings don't align with valuations. We're trimming smallcap exposure and leaning into largecaps and large midcaps, where we see better operational momentum and value.'Q4 did deliver a few bright spots for the broader market. 'The Nifty Midcap 150 reported 15% YoY profit growth and the Smallcap 250 delivered 12%. Margin performance was largely stable in midcaps, though smallcaps saw some pressure,' said Krishna Appala, Fund Manager at Capitalmind Appala also flagged that the earnings catch-up story has its limits. 'Valuations remain stretched — midcaps trade at 34x and smallcaps at 32x trailing earnings, well above the 22x seen in largecaps. The divergence between earnings and valuations in the broader market calls for greater selectivity.'He further added that while largecaps may appear sluggish, they now offer a better risk-reward profile. 'Despite the sharp upmove recently, largecaps currently offer a better balance of earnings visibility and valuation comfort on a forward-looking basis. The environment today rewards fundamentals and discipline over broad-based exposure — especially when mid and smallcap multiples leave little room for error.'Still, not all fund managers are ready to write off smallcaps just yet. Vaibhav Chugh, Director and Head of Sales at Whiteoak Capital AMC, sees rich opportunity in the chaos — provided investors pick wisely.'Yes, the result season started slow but as it progressed, midcaps and smallcaps have surprised on growth trajectory as well as upgrades to downgrades statistics,' Chugh said. 'We continue to be overweight small caps. We find relatively high alpha opportunities due to the heterogeneity of business models, sectors and sub-sectors in the smallcap space — which is the ideal setup for bottom-up stock pickers.'With nearly 70 smallcap names delivering eye-popping returns in a matter of weeks, the lure of the next multibagger is proving hard to resist. But experts caution that investors need to tread carefully — the fundamentals are not as broad-based as the rally suggests, and elevated valuations leave little room for disappointment. The smallcap story is far from over, but chasing momentum without earnings to back it could lead to painful lessons.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
