Promoters of Crompton Greaves have been buying shares of the company in the open market to gradually increase their holding as well as support the shares of the company that had plummeted on performance and governance issues. Promoter entity Avantha Holdings has bought 1,627,995 additional shares, amounting to 0.4% of the equity, of Crompton Greaves between August 18 and September 6 in the open market for an estimated amount of Rs 24 crore. The shares have been acquired through the creeping acquisition route at the relevant prevailing market price. As per capital market regulations, promoters of companies can buy shares of their company from the stock market through the creeping acquisition route to increase their stake up to 75%. But, in any particular year, they can only buy up to 5% equity of the company through this window. Promoters held around 41% in Crompton Greaves as on June-end.
The power equipment manufacturer and electrical appliance maker lost investors’ favour after it reported a decline of 60% in net profit in the first quarter of 2011-12 on a muted sales growth of 6%. What aggravated investors’ concern was that the company’s management cut its revenue growth guidance for 2011-12 to 10-12% from 14% earlier, anticipating more challenging times in coming quarters. It also slashed the forecast for operating margin for the financial year to 8-10% from 13.5% predicted earlier. Concerns over corporate governance in the company have also weighed on investors’ sentiment after SM Trehan, who retired from the company on June 1 as the managing director and is now a non-executive vice-chairman, sold almost his entire holding in the company ahead of the company’s quarterly earnings.
| Company Name | CMP |
|---|---|
| Havells India | 1329.25 |
| Siemens | 3822.60 |
| Apar Inds | 11824.75 |
| ABB India | 7569.50 |
| Waaree Energies | 3440.00 |
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