In contrast, they had sold shares worth Rs 11,893 crore against purchases of just Rs 1,120 crore in the previous month, a buy-to-sell ratio of 0.09.
Mumbai: For the first time after 19 months, company insiders — including promoters, directors and staff — bought into their respective companies, a reversal of the usual selling trend. The Covid-19 pandemic sent stocks into deep correction, prompting the insiders to buy as much as they could.
In March, insiders bought shares worth Rs 3,701 crore and sold to the tune of Rs 1,713 crore, a buy-to-sell ratio of 2.16, showed a data compiled from nseinfobase.com.
In contrast, they had sold shares worth Rs 11,893 crore against purchases of just Rs 1,120 crore in the previous month, a buy-to-sell ratio of 0.09.
According to nseinfobase.com, the last time when insider buying overtook selling was in July 2018 when they bought shares worth Rs 4,149 crore as against selling of Rs 1,263 crore. The buy-to-sell ratio was 0.16 in FY20, 0.26 in FY19 and 0.30 in FY18.
Persistent selling pressure across the board in the aftermath of the national lockdown has offered excellent opportunities for the insiders to increase their stake in the company, said experts.
ADVERTISEMENT
“Insider buying indicates management’s expectations about positive prospects for the company and indicates confidence in their business,” said Pranav Haldea, managing director, Prime Database Group. “However, investors should still undertake a comprehensive evaluation of the company before buying while insider selling may not necessarily imply a negative outlook.”
“Creeping acquisition by promoters is a positive sign which reflects their conviction in the long term business prospects of the company,” said Mehul Savla, partner, Ripplewave Equity Advisors.
