Promoter sales impact on share price mostly positive

PROMOTERS SALES CAN often be a positive for the firm's stock price, revealed data from Carnelian Asset Management.

- NESIL STANEY

The asset management company evaluated promoter sales in the last 10 years and found 70% of such firms delivered positive returns, while 15% of them generated more than 30% compounded annual growth rate.

Family-owned business promoters, private equity promoters (majority and minority) and professional management (CEO and CFO) are insiders in a listed firm. Of these the family-owned promoters may sell for numerous reasons including separations or settlements. In Kirloskar Group, Shivalik Bimetal, and InterGlobe Aviation, such moves clarified governance. These transactions should be contextualized within a maturing capital market, the firm said in a report to its clients.