Promoter holding is an important indicator to consider when investing in a company. It shows the confidence that promoters hold in their own company. Additionally, it indicates the stability of the company.
While high promoter holding is usually a positive sign, you must consider other factors like pledged shares and changes in promoter stake over time while making new investment decisions. In this article, we will look at two companies in which promoter holdings are declining and try to understand the “WHY” behind it.
Godrej Consumer Products Limited (GCPL) is a global FMCG company manufacturing personal care and home care products. GCPL offers household insecticides, home and fabric care, personal hygiene, hair color, and beauty products under brands like Good knight, Cinthol, Godrej Expert, HIT, Godrej Aer, Darling, and more.
Due to the realignment of shareholding in various Godrej Group companies following a family settlement agreement, the promoter holding in the company decreased to 53 percent in Q3 FY25 from 62 percent in the previous quarter. This led to the splitting of the 127-year-old conglomerate into two parts.
With a market capitalization of Rs 1,17,866 crore, the shares of Godrej Consumer Products Ltd are currently trading at Rs 1,152 per share, down by 25 percent, from its 52-week high of Rs 1,541.85 per share. It has a P/E ratio of 68.41x, much higher than the industry P/E ratio of 32.86x, signaling likely overvaluation.
It reported a revenue of Rs 3,768 crores in Q3 FY25, up by 3 percent, from its Q3 FY24 revenue of Rs 3,660 crores. However, it reported a slight decline of 14 percent in its Q3 FY25 net profit of Rs 498 crore versus net profit of Rs 581 crore in Q3 FY24. Its net profit slightly increased by 1.42 percent from its previous quarter revenue of Rs 491 crores.
Home First Finance Company India Ltd. (HFFC) is an Indian housing finance company that offers home loans, construction loans, renovation loans, loans against property, and commercial property loans. It serves salaried professionals, self-employed individuals, and small business owners.
Home First Finance is backed by private equity with notable players that is True North and Aether (Mauritius) Ltd, as its key promoters. So, like every private-equity fund they are selling the stakes. As of March 2025, they have reduced their shareholding from a high of 33.5% in Q3FY24 to 14.3% in Q3FY25.
With a market capitalization of Rs 8,993 crore, the shares of Home First Finance Company Ltd are currently trading at Rs 998.85 per share, down by 25.5 percent, from its 52-week high of Rs 1,383.30 per share. It has a P/E ratio of 24.95x, higher than the industry P/E ratio of 19.28x, signaling overvaluation.
It reported a revenue of Rs 406 crores in Q3 FY25, up by 37 percent, from its Q3 FY24 revenue of Rs 296 crores. It reported a surge of 22.7 percent in its Q3 FY25 net profit of Rs 97 crore versus net profit of Rs 79 crore in Q3 FY24. Its net profit slightly increased by 5 percent from its previous quarter’s revenue of Rs 92 crores.
Written by Satyajeet Mukherjee
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