i said what if ,the block deal that 7million shares indicate so it cant be ruled out
promoter sold and fii picked up
its on business channel
they sold around 6% stake in the company
I think without making conjectures, lets wait for definite news to come through.
And then watch the reaction.
All these things dont change the fundamentals of the company at all. So as I said before once these events are through, focus would again shift back to business.
Here we go the information shared with exchanges -
PI Promoter stake sale.pdf (152.8 KB)
Edit:
Ok, now we know the reason behind the volatility.
- Personally, Iām a wee bit disappointed that Promoter has chosen to sell at a discount to market price. The price is 610 as per @manish962ās post above.
- While we should respect promoterās personal ambitions and requirements as they are the ones who worked hard and made the company what it is today, I however also would like to derive that promoters would have felt that rapid growth phase might be over and future might be a stable, long term growth phase of 18-20%, so would have timed the stake sale accordingly. I believe Salil was also alluding to this 18-20% growth in multiple interviews recently.
- Fully agree with @hitesh2710 that focus will shift back to business and itās as business usual and the business fundamentals wonāt change.
5 Likes
I think this is good news . We know how promoters of cos like page continued to sell and price continued to go up - this will also help increase the free float and help in indices like msci ? Now a new window of speculative thought has opened up - will they sell out one day ? perhaps to a mnc like dupont ?
1 Like
Unless there is some concrete reason/need from promotersā side, I am a bit surprised at this move of selling almost 6 % equity in the company without giving any benefit to the company/shareholders. PI promoters are quite rich guys themselves and unless there is some significant charity funding that is to be done out of this, I donāt find any logic in this.
Co.'s business model is sound, growth visibility is good and what I believe is still CSM business is not mature/saturated and hence, if any dilution has to be there it should be via fresh dilution so funds can flow to the company for future expansions. Agreed there is no immediate funding need and internal cash generation is robust but a 1500 cr. Scale in CSM is nothing in the backdrop of global opportunity and based on the history of company where they always preferred growth by judicious use of resources, the rationale strategy should have been to reward minority shareholders handsomely to let them benefit out of robust cash generation now and make fresh dilution when funding need arises rather then raise funds at personal promoter level.
Rgds.
Discl. - Minor investment. Less than 1 % of portfolio.
4 Likes
I confirm that there is news in Dalal Street that promoter sold 6+% and HNIās and FIIās are buying
Already itās announced by management itself today afternoon to bse via press release :
Salil singhal disclosure
It seems quite a few respected funds like GMO emerging market fund, sbi etc have lapped up shares of PI Industries in bulk deals ( today).
Hitesh (this question is for U as i feel you are an expert in pharma space) any midcap pharma stocks to buy other than Granules and suven. Thanks in advance.
1 Like
hahaā¦so much for value investing.Everyone was talking about Munger and Buffett when the stock prices were raising and once the stock prices started falling and promoters are selling their holdings everyone started questioning the biz model and promoters ambitions. IMHO this is a non-event for biz and doesnt need this much attention. Even if Cartica sold or PI promoters sold how does it matterā¦No wonder there is a lot of hypocrisy in Value Investing that became evident today
4 Likes
well, you are right to question the motivation of boarders to raise doubts about the management. Promoters selling a large holding at discount always raises questions. From business point of view things have slowed considerably. CSM remains insulated but one needs to remember that Agri comm crash will ultimately hurt new product developments and consecutive droughts are not helping either.
Disc: I sold it just in time before I saw it spiking during the last few minutes yesterday.
Well, I bought a good chunk(8% of my portfolio) yesterday as I felt this was an opportunity to buy in a great compounding story at a discount. Business is still strong and growing. Agri will recover at the max next year. So no doubt on the business side.
Promoters still own 51% and they are not going anywhere for sure. So far they have not shown any characteristics where I will doubt their capability/intention which should create any doubt in our minds.
11-Dec-2015 PI Industries (BSE) INDIA MIDCAP MAURITIUS LIMITED BUY 1000000 610.00
11-Dec-2015 PI Industries (BSE) SALIL SINGHAL SELL 8800000 610.72
11-Dec-2015 PI Industries (BSE) SBI MUTUAL FUND A/C SBI BLUE CHIP FUND BUY 900000 610.00
11-Dec-2015 PI Industries (BSE) GMO EMERGING DOMESTIC OPPORTUNITIES FUND BUY 865808 610.00
11-Dec-2015 PI Industries (BSE) STICHTING DEPOSITARY APG EMERGING MARKETS EQUITY POOL BUY 950884 610.00ā¦
Promoters sold 88 lkh sharesā¦around half of that acquired by big fundsā¦remaining forced on marketā¦Not sure why promoter in hurry to exitā¦
Exactly, and this news of promoter exiting must be in the market for sometime making it weak for long time.
1 Like
Somehow, I get a different feeling on this whole episode, my thought process as I look back the past 2 days is written below. I may be thinking unnecessarily and all the below will not have any impact on the business at all, but let me put my views anyway.
-
1 day before the stake sale, there was a huge spike of the stock until about 710 and there were pending buy orders of 28000 plus on BSE, if I remember correctly as I have looked at this data due to the unusual spike.
a. Someone might be testing the upside strength of the stock
b. This spike would have given psychological advantage to sellers the next day as looking at a stock which touched 700+ a day before and being available at around 600 the next day will make buyers plunge for a buy. -
The above points are important because only half of promoters stake were bought by big boys while the other half is a forced sell on the market as observed by boarder in the above post.
-
Interestingly, promoters could secure big boys for only half the amount of stake sale and the rest is sold to public! Of the 8800000 shares sold by promoters, 3716692 were bought by big boys.
Anyway, I will rest my rant on this topic here, let me move on.
Have a nice weekend.
mgt should clarify their rationale for such forced sale
this perfect setup any kind of such saleā¦they might have contacted operator to do the saleā¦There are lot of examples of this kind(in the book Reminiscences of Stock Operatorā¦must read)