Ace investor Radhakishan Damani, known for his strategic investments, recently made headlines by selling 1 lakh shares of VST Industries, the well-known cigarette and tobacco manufacturer, in a large deal valued at ₹4.39 crore. This transaction was recorded on Thursday, September 19, and has sparked significant interest among those who invest in stocks. Let’s get into the details of this sale and what it means for the company and the stock market.
Radhakishan Damani’s large share sale
Radhakishan Damani sold 1 lakh shares of VST Industries at ₹439.05 per share, leading to a total deal size of ₹4.39 crore. According to the data from the National Stock Exchange (NSE), this sale took place as part of a bulk deal on September 19, 2024. Before the transaction, Damani held a 3.47% stake in VST Industries, equating to 5,35,185 shares in a personal capacity as of June 30, 2024.
Damani’s involvement with VST Industries goes beyond his personal holdings. As of June 2024, his investment firms collectively held around 31% of the company’s shares, making him one of the largest shareholders. This large stake has drawn attention from investors who closely monitor his market moves, particularly those who actively invest in stocks.
Reliance Mutual Fund and Thrift Savings Plan step in
Following Damani’s share sale, Reliance Mutual Fund and Thrift Savings Plan were among the key buyers in the large deal. Reliance Mutual Fund purchased 85,000 shares of VST Industries at ₹439.96 per share, resulting in a transaction worth ₹3.74 crore. Meanwhile, Thrift Savings Plan bought 83,970 shares at ₹440.74 apiece, making the deal worth ₹3.70 crore. These purchases show continued interest in VST Industries by major institutional investors, reaffirming its value for those who invest in stocks.
VST Industries' performance and recent developments
VST Industries has had a series of significant developments recently. On September 16, 2024, the company received approval from the stock exchanges to list 15,44,19,200 equity shares of ₹10 each, which were allotted as part of a bonus issue. This bonus issue announced earlier, involved a 10:1 ratio, meaning shareholders received 10 bonus shares for every 1 share held. The record date for this bonus issue was September 6.
Damani, with a 34% stake in the company, was the largest beneficiary of this bonus issue. However, ahead of the company’s first-quarter results, he reduced his holdings by selling a 2.26% stake, adding to his recent share sale of ₹4.39 crore.
The company’s financial performance in the latest quarter has not been as robust as expected. VST Industries reported a 3.5% decline in revenue for the June quarter, posting ₹321.33 crore compared to the same period last year. Additionally, its EBITDA dropped by 30.4% to ₹73.28 crore in Q1 FY25. Despite this, the company’s stock saw a modest 1% gain, closing at ₹440 per share on the NSE on Thursday, reflecting investor confidence in the long-term outlook of the company.
What does this mean for those who invest in stocks?
For those looking to invest in stocks, large deals like this offer valuable insights into market trends and investor behaviour. Radhakishan Damani’s decision to sell a portion of his shares could be seen as a strategic move, particularly given VST Industries' recent bonus issue and its first-quarter performance. On the other hand, the substantial purchases by Reliance Mutual Fund and Thrift Savings Plan signal confidence in the stock’s potential.
Investors might consider whether the current market conditions and VST Industries' recent performance align with their investment strategies. Those who actively invest in stocks may want to monitor the company’s upcoming financial reports and any further moves by major stakeholders like Damani.
Wrapping up
The recent large deal involving Radhakishan Damani’s sale of VST Industries shares has generated a great deal of interest, especially among those who invest in stocks. While the company has faced some short-term financial challenges, the involvement of major institutional investors suggests that VST Industries still holds value in the long run.
As always, those looking to invest in stocks should stay informed and consider the broader market trends before making any decisions. Whether you're a seasoned investor or just starting, understanding the impact of large deals and shareholder movements can help you make more informed choices in the stock market.
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