Stocks with market cap around Rs 500 crore and promoter holding over 70 per cent: Do you own them?
Promoter holding provides investors with valuable insights into a company's prospects, a significant stake from the founders signals confidence in the company's future.
Promoters are the people or groups who start and build a company. Their ownership stake, called promoter holding. But as an investor its important to understand the impact of promoter holding while analysing a stock.
Why Does Promoter Holding Matter?
Promoter holding is significant for investors because it reflects the promoters' level of commitment and confidence in the company's future:
Alignment of Interests: A high promoter holding indicates that the promoters' financial well-being is closely tied to the company's success. This alignment of interests can incentivize promoters to make decisions that benefit the company in the long run, rather than focusing solely on short-term gains.
Signal of Confidence: A significant promoter stake suggests that the promoters believe in the company's growth potential. This confidence can inspire investor trust and potentially lead to a higher valuation for the company's stock.
Stability and Control: A strong promoter holding can provide stability and control. Promoters can influence major decisions and ensure the company maintains its strategic direction.
Benefits of major promoter holding:
Major promoter holding in a company offers several potential advantages. Firstly, it fosters a long-term focus, as promoters with significant stakes tend to prioritize the company's sustained growth and stability over short-term gains. This often translates into responsible financial management and strategic decision-making. Secondly, a substantial promoter holding reduces the risk of hostile takeovers, providing investors with confidence in the company's continuity and growth prospects. Lastly, companies with major promoter holdings typically wield stronger bargaining power with stakeholders like lenders and suppliers, owing to the perceived stability and commitment demonstrated by the promoters.
Other factors to consider:
While major promoter holding can signal stability, it's not always indicative of success. Consider the promoters' track record and corporate governance practices. Also, watch out for pledged shares, which could suggest financial strain or uncertainty about the company's future.
These stocks, with a market capitalization of around Rs 500 crore each, boast promoter holdings surpassing 70 per cent:
|
S.No.
|
Company name
|
CMP
|
Market cap. (Rs. Cr.)
|
P/E
|
Promoter holding (%)
|
|
1
|
Bharat Seats Ltd
|
160.7
|
504.58
|
20.69
|
74.59
|
|
2
|
Tantia Constructions Ltd
|
32.95
|
510.74
|
55.34
|
94.97
|
|
3
|
Synergy Green Industries Ltd
|
373.6
|
527.9
|
44.96
|
74.02
|
|
4
|
Suraj Ltd
|
296
|
543.56
|
19.65
|
75
|
|
5
|
Donear Industries Ltd
|
106.08
|
551.61
|
20.17
|
74.56
|
|
6
|
RBZ Jewellers Ltd
|
143.1
|
572.4
|
25.61
|
75
|
|
7
|
United Drilling Tools Ltd
|
282.05
|
572.63
|
64.07
|
74.65
|
|
8
|
Sayaji Hotels Ltd
|
328
|
574.58
|
51.72
|
74.95
|
|
9
|
Laxmi Goldorna House Ltd
|
279.1
|
582.53
|
-
|
74.97
|
|
10
|
Pyramid Technoplast Ltd
|
158.45
|
582.85
|
19.23
|
74.94
|
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Conclusion:
Promoter holding tells investors a lot about a company. It's good to see a big stake from the founders, showing they believe in the company's future. But before investing, one should check their track record, how they run the company, and if they've pledged any shares. Remember, promoter holding is just one part of the puzzle when deciding to invest.
Disclaimer: The article is for informational purposes only and not investment advice.