Promoters hike stake as markets melt

An article featured in the Economic Times today (here) talks about how promoters have taken advantage of the market melt-down to hike their stakes in companies. ET estimates that around 100 promoters have increased their stake in Jan-Mar 2008. The prominent names include - Arvind Mills, Bombay Dyeing, Tata Metaliks, Reliance Energy, Aditya Birla Nuvo, Ultratech, JSW Steel, Max India, Bajaj Hindusthan and UB Engineering.

Promoters buying stock in companies they founded (or are major shareholders) often goes well with the stockmarket. A possible exception is Mr. Rao of Orchid Chemicals who has been frantically searching for monies and aides to lend him money to ward off a hostile bid by Solrex. Also, read an article featured on Business Today about 10 years back on why promoters should seek to increase stakes in companies. (here)