Zerodha Broking is India’s largest stockbroker and is credited with pioneering the discount broking strategy in the country since it was established in 2010 by Nithin and Nikhil Kamath. Zerodha is India’s most technologically sophisticated stock broker, which offers a diverse variety of financial solutions to equities market participants. 

Nikhil Kamath of Zerodha highlighted concerns about a worrying trend in promoter activity last week when Indian stock markets were at all-time highs. Nikhil Kamath tweeted a post indicating that promoter selling in 2023 in India has been four times higher than in 2018 and twice as high as in 2022. 

Furthermore, he pointed out that promoter selling levels in 2023 are ~ 0.3 percent of average market capitalization, compared to 0.13 percent in 2018. 

Promoters are those who directly or indirectly influence the activities of the company, whether as a shareholder, directors, or others. Promoter holding is the portion of a company’s shares that its promoters hold., i.e. the individuals or entities who founded or currently control the company. 

Higher promoter holding indicates promoter confidence in the company and stability in the business. Furthermore, companies with a strong promoter stake are less likely to engage in activities that are detrimental to shareholder interests. 

Nikhil Kamath highlighted disconcerting statistics on the X platform.(Formerly known as Twitter). He stated that in 2023, promoter selling stakes from Indian companies has increased to four times the levels witnessed in 2018 and twice as high as in 2022. 

According to Kamath, the total value of promoter selling is Rs 80,754 crore as of August 2023. It is four times the corresponding amount in 2018, which was roughly Rs 19,258 crore, and twice as much as in 2022, when it reached Rs 41,020 crore, based on data from CNBC and Prime Database.

Furthermore, On Tuesday. the domestic index closed in the red. The BSE Sensex fell 65.25 points or 0.099% to 65,958.44. Similarly, The NSE Nifty fell 6.05 points or 0.031% to 19,668.50. 

Written By Omkaar Chitnis


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