This data item is calculated as the difference between the current strategic ownership percentage and the percentage 3 months ago. Analysing strategic ownership change is tricky as lot of factors have to be considered before deciding on whether the change is positive or negative for the company
- If the strategic entity is selling off stake when the company is reporting poor fundamentals, it means that the entity has lost hope in the future of the company
- A strategic entity increasing stake in the company when share prices are falling either due to weak market conditions or poor fundamentals usually signifies that the long term potential of the company is strong and that share fall is a temporary phenomenon
- A marginal stake dilution to bring in other strategic partners is usually seen as positive endorsement of the company. For example real estate company DLF recently sold 40% stake in a subsidiary company to GIC of Singapore. Markets reacted positively to the news.
- A marginal stake dilution when strategic entity has very high holding is considered positive, as the number of shares freely available to buy and sell increases.
- If the strategic entity increases stake in the company via market purchase route or preferential allotment at market price or above market price, it is considered positive for the stock