We compare the shareholding data for Sept 30,2010 and Dec 31,2010 for Gujarat Ambuja Exports
As we can see.
1. Total number of shareholders has reduced further from 56690 to 56156 .. which means consolidation is still "on"
2. Individual shareholders (Weak hands) are the largest sellers. No of Individual investors has reduced from 55949 to 55362 a decrease of 587 individual shareholders.. In terms of number of shares shareholding reduced from 35,284,376 to 34,297,786 reduction of 986,590 shares.
3. High Net-worth Individuals (HNI) who hold more than 100 thousand (1 lakh ) face value equity ie 50,000 shares (Face Value = 2). HNI have reduced from 28 to 27 but the number of shares held has increased from 2,701,554 to 2,988,361 an increase of 286,807 shares even as number of shareholders has reduced.
4. No of corporates have increased while the % shareholding has reduced..
5. Mutual funds have also entered into GAEL and no of MF/UTI has increased from 11 to 14 also the number of shares held has also increased from 6,353,255 to 9,132,745 an increase of 2,779,490 shares.
6. Promoters have also increased shareholding from 63.93 to 63.95 an increase of 25,000 shares.
Conclusion: Public shareholding is decreasing and decreasing fast. Individual shareholders avg shareholding was 630.65 in Sept 2010 and in Dec 2010 avg. has fallen to 619.50. Weak hands are defined as fickle minded short term oriented and Individual investors are living up to that definition.
Another thing which is not being considered is that even within individual investors holding of 34,297,786 only 15,234,216 are in demat rest are in physical form and cannot be traded.. Actual liquidity in GAEL is pretty low and any concerted buying is going to push GAEL easily above 50 levels..
This is a great entry price 35-38 level. 50 is given and it would be advisable not to sell at 50 levels.. Investors who bought low and are planning to enter again at lower levels are waiting and the wait is getting longer and longer.. It always make sense to play for the long term specially when we are confident of the company financials and the overall health of the economy.
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