MUMBAI: Big bull Rakesh Jhunjhunwala could have completely exited or be holding less than 1% in Escorts during the March quarter even as mutual funds cut their stake to a negligible quantity during the quarter, the latest shareholding data shows.
Jhunjhunwala’s name doesn’t figure among the public shareholders. As of the preceding quarter, he held 5.68% in Escorts. For an individual shareholder’s name to appear as a public shareholder, he or she must hold a percent or over of the equity capital in a listed company.
MFs, who held 8.16% previously, sharply cut their combined stake to just 0.28% during the March quarter, data on BSE shows. The stake sales come amid an open offer by Japanese tractor giant Kubota which has upped its stake to 55.82%, including shares held in the escrow demat account, in March from 16.39% in the previous quarter through a preferential allotment and open offer aggregating Rs 9370 crore. The open offer which concluded last month saw shareholders’ subscription of 1.39 times.
The Japanese tractor maker became a joint promoter with the Nanda family after the open offer. Analysts like Sunil Pachisia, director, institutional sales, Pratibhuti Vinihit, believe that with Nanda’s holding of 3.7 crore shares (28.1%) and Kubota’s 7.36 crore shares aggregating to almost 56%, the free float has reduced and this would keep prices largely stable. “Selling might be seen around Rs 1900 plus levels.”
Escorts closed at Rs 1610 on Friday. Since the open offer announcement on November 18 last year, Escorts share has underperformed the Nifty Auto Index falling by 10.7% against the auto index’s 7.26% fall. The tendering of the shares and sale in the secondary market when the price rose in anticipation of the stake increase by Kubota has caused the correction, say analysts who remain bullish on the medium to long term prospects.
Company’s sales and operating profit in Q3
In Q3 of the previous fiscal year (FY22), the company’s sales were up almost 19% to Rs 1984 crore on a sequential basis, while operating profit grew 26% to `265 crore. PAT rose 9% to Rs 194 crore sequentially while the operating profit margin rose 0.77% to 13.33%.