Institutional investors like Kotak Mahindra MF and SBI MF acquired stakes in Avalon Technologies and Innova Captab on September 30. While mutual funds increased their holdings, significant selling by promoters and individuals caused volatility, with Innova Captab shares dropping 8.76% during the session.
The National Stock Exchange witnessed a high volume of trading activity on September 30 as institutional investors rebalanced their portfolios through bulk deals. These transactions, involving both listed electronics and pharmaceutical companies, highlighted a contrast between fund buying and promoter or large shareholder exits.
In the electronics sector, Avalon Technologies saw a major ownership shift. The promoter group, including KBS Family Trust and Bhaskar Srinivasan, sold a combined 6% stake in the company. This exit, valued at approximately Rs 870.61 crore, represented a significant supply of shares in the market. Kotak Mahindra Mutual Fund emerged as a key buyer, absorbing a 3.59% stake in the electronics manufacturer. The purchase, worth Rs 521.38 crore, suggests that institutional interest in the electronics manufacturing space remains active despite the exit of major existing shareholders.
Pharmaceutical firm Innova Captab experienced more immediate pressure from these trades. An individual investor, Gian Parkash Aggarwal, offloaded a 2.7% stake in a deal worth Rs 167.4 crore. While SBI Mutual Fund stepped in to purchase a 1.45% stake, the total selling pressure proved too high for the stock to absorb, resulting in an 8.76% decline in its share price by the end of the day. This price movement serves as a reminder that even when mutual funds enter a stock, heavy selling by large individual investors or promoters can temporarily outweigh buying demand, leading to volatility.
The day also saw activity in the private space with companies like Shadowfax Technologies and Molbio Diagnostics. Newquest Asia, an affiliate of TPG, reduced its stake in the logistics firm Shadowfax by 0.68%. In the diagnostic sector, HDFC Mutual Fund entered a new position in Molbio Diagnostics, buying a 1.99% stake. This was balanced by the exit of Business Excellence Trust III, which sold an equivalent amount.
For investors, these bulk deals provide a glimpse into how large money managers are shifting their focus. While mutual funds often increase exposure to sectors they believe have long-term potential, such as electronics or diagnostics, the exit of promoters and large investors can create short-term price instability. The main monitorable for shareholders in companies like Avalon Technologies and Innova Captab will be how the stock stabilizes in the coming sessions following this change in ownership structure and whether the institutional buyers continue to support the share price at current levels.