The trend of promoter selling has been gaining momentum over the past year, with shares worth ₹59,291 crore, ₹24,264 crore, and ₹21,858 crore sold in the past three quarters. 

“Promoters are selling stakes due to multiple factors beyond just bull market conditions. These include reducing debt, building a war chest to diversify businesses and complying with regulatory requirements,” said Anand K. Rathi, co-founder, MIRA Money. “While the bull market has contributed to this trend, I don’t see it continuing indefinitely. Promoters will eventually stop selling once they’ve achieved their objectives, likely slowing down soon,” he added. 

Also read: Let’s get real about promoter control of companies

Sectors such as banking and finance, pharmaceuticals, technology, and construction saw significant promoter offloading.

Indus Tower topped the list with promoters diluting their stake by 17 percentage points in the last two quarters . Other notable names include Mphasis, whose promoter stakes declined from 55.5% in March 2024 to 40.4% in the April-June quarter. 

CSB Bank saw 9.7 percentage points decline in promoter stake, ZF Commercial Vehicle saw 7.5 percentage points, Aptus Value Housing saw 7 percentage points and Timken India 6.65 percentage points.

A Mint analysis further showed that promoters of private group companies were most actively paring their stakes, offloading shares worth ₹35,413 crore. Companies owned by foreign promoters and public sector groups followed suit, contributing nearly 22% and 21% of the overall stake sale during the quarter, respectively.

On an aggregate basis, promoter’s stake has decreased by over 200 basis points to 51.6% in the first quarter of the current fiscal, down from 53.8% in the same quarter of the previous fiscal year (FY2024).

Also read: Promoters trim nearly $7 billion in share pledges riding buoyant equity markets

Rathi expects the markets to remain positive in the near term, driven by a stable government, a growth-oriented budget, and reasonable valuations. The budget’s focus on employment and global factors like low interest rates and controlled inflation also support this trend. The Reserve Bank of India’s effective management of inflation adds to the optimism. it said. 

While returns may moderate from the exceptional gains of the past couple of years, a positive trend is expected in both the short and medium term, with strong long-term returns likely. Overall, the outlook remains upbeat, with multiple factors driving market growth, he added.