promoter holding in Indian companies: Promoters increase stakes in Indian companies amid stock market weakness

ET Intelligence Group: At a time when the promoter holding in Indian companies have fallen to a record low, some promoters have used the recent weakness in the stock market to increase their stakes. The number of companies where the promoter holding increased sequentially reached a six-quarter high of 33 in the March 2025 quarter amid the selling pressure from foreign investors during the period. Major companies in the list include Jindal Steel and Power, Godrej Industries, IFCI, India Cements, Usha Martin, and Maharashtra Seamless.

In addition, 60 companies showed higher promoter holding from the year-ago levels. These companies were part of a common sample of 431 companies from the BSE 500 index. The sample companies have reported shareholding data over the past five years and each of them had promoter stake of 25% or more. In the December 2024 quarter, 21 companies had reported a sequential increase in the promoter holding.

The stock market remained volatile during the March quarter with benchmark indices losing over 1%. Foreign portfolio investors (FPI) remained net sellers of Indian equities in March for the third consecutive month though they turned bullish in the second half of the month and continued to invest through April.

While select promoters used the weak market sentiment to increase their holdings, at a broader scale the promoter stake in India Inc has been dwindling. According to a recent report by Motilal Oswal Financial Services, promoter stake in Nifty 500 fell by 140 basis points year-on-year to 49.5% in March 2025, while the ownership of domestic institutions rose by 160 basis points to a record high of 19.2%, surpassing the FPI holding of 18.8%.

Among sample companies, the promoter group of Godrej Industries, a conglomerate involved in various segments including consumer products, chemicals, agriculture, and real estate, raised its stake to 69.7% in the March quarter from 65.7% in the previous quarter. The company’s stock had fallen to a low of ₹826 in the middle of the March quarter from ₹1,167 at the beginning of the quarter. The stock has recovered since, closing at ₹1,082 on the BSE on Friday.

In the case of India Cements, UltraTech which acquired it in July 2024, raised the stake sequentially to 81.5% in the March quarter from 55.5%. UltraTech needs to reduce the stake to 75% or less by February 2026 to comply with the regulatory requirement of minimum public shareholding of 25%.