This is common practice wherein promoters of select companies use the stock sell-off as an opportunity to lap up shares and increase holdings through the turbulence in the market despite uncertain near-term outlook. For the promoters, it helps to consolidate their control over the company at low prices but importantly, it also gives a signal to the market that promoters are willing to stand behind the company and express confidence.

Should investor take this as a cue and hunt for value in such stocks? Data with BSE showed promoters of 300 companies during the recent correction. Some of the major companies that used the market route to lap up shares and increase their control are names like Tata Chemicals, Tata Consumer Products, Tata Power, Tata Steel, Bajaj Auto, Bajaj Finance, Axis Bank, Dabur India, HCL Tech, Maruti Suzuki, Alembic, Asian Hotels, Deepak Nitrite, Glenmark, Quess Corp and PVR. Many of these stocks had corrected between 20% and 70% in the recent past. There are many more but moral of the story is that promoters are buying stocks at lower levels to send a message to markets.