Skip to main content

Corporate big wigs are wrong about timing of exiting the market


MUMBAI: While retail investors may have missed the bus in the current round of market rally, many senior officials of listed companies who had rushed to sell their Esops have made a killing in the market. During the past month, nearly 800 such transactions were reported in the stock exchange.

HDFC, ITC, HDFC Bank, Kotak Mahindra Bank, Lupin, IndusInd Bank, Axis Bank, ICRA, Mindtree andGlenmark are some of the companies where executives sold their shares, taking advantage of what's been described as a pre-poll rally.
Experts say that employees, who had earlier converted their Esops into shares when share prices were low, are selling them now as prices are at new highs. The Sensex hit a record 22,000 on Monday.
"The trend in exercising stock options has not suddenly gone up, but those who had converted their stock options earlier are selling now to take advantage of the higher prices," said Harshu Ghate, CEO, Esop Direct, an Esop consulting firm.
"In fact, those who had converted Esops into shares earlier, would be the biggest gainers as they had paid perquisite tax on a lower price," he added.
Employees are required to pay perquisite tax on the difference between the fair market value (FMV) on the date of exercising their options. Capital gains have to be paid only if shares are sold within a year.
K Vaidyanath, former director of ITC, sold nearly 3 lakh shares in the last few days, while Nakul Anand, whole-time director of the tobacco company sold 1.3 lakh shares last week. Other top ITC officials who sold shares include SH Rahman, KN Grant, SH Khan and SB Mathur.
Gautam Bhagat, a member of HDFC executive management, sold 50,000 shares of the mortgage company last week, taking advantage of the surge in prices.Similarly, over 40 employees of pharmaceutical companyLupin have sold shares of the company in the past month. Lupin shares hit a record high of Rs 1,003 on March 3 this year. Deepak Gupta, joint managing director of Kotak Mahindra Bank, too, had sold 20,000 shares of the bank recently.
A company awards stock options to its employees based on their performance. Under an Esop, employees have the right to buy shares of the company on a pre-determined date at a pre-determined price.

Comments

Post a Comment

Popular posts from this blog

Best IELTS and English language training institutions in Hyderabad

IELTS stands for International English Language Testing System. As the name implies it is basically an English test for testing the proficiency of the language in an individual.  Training for IELTS can be taken to pass the IELTS exam or to develop good english language skills. I am giving the training institute addresses for Hyderabad. The test system is jointly managed by the British Council,IDP education ltd and University of Cambridge ESOL Examinations and more than 1 million candidates are taking the exam all over the world. The test has two versions : 1. Academic 2. General training Academic  version is for people who plan to continue their higher education by enrolling in universities in countries like US,UK,Australia,Canada,New Zealand etc.The academic institutions in these countries consider the IELTS score as a criteria for the admission process. General training is mostly for immigration purposes in countries like Australia,New Zealand,Canada etc. It may ...
9 comments
Read more

How to use home loans most effectively for tax benefits

1) Deduction on interest: If you are paying EMIs for a home loan you took to buy a house, the interest component in the EMI can be claimed as deduction. You must be both an owner and a co-borrower (in the loan) to claim tax benefits. This deduction can be claimed starting the year in which the construction of the house is completed. Suppose the construction of your house was completed on August 30, 2014, you can claim deduction for interest for the entire 12 months in financial year 2014-15. So every year a maximum of Rs. 2 lakh can be claimed for a house that you use for your own residence. If your house is rented, the entire interest for the year can be claimed as deduction. The interest payments for the year shall result in a loss under the head 'income from house property'. This loss can be adjusted against in the same year against other heads of income in your income tax return including salary. Therefore, it reduces your total taxable income and the tax you pay thereon. A...
2 comments
Read more

Communist party launches 'China Operating System' to oust iOS and Android

hina officials have launched a national operating system in an attempt to take back control of the country’s computer market from American companies such as Google and Apple. The software has been in development for more than a year, but has been released at a crucial time with revelations about US-led surveillance sparking fears over the integrity of American-designed software. Known simply as the China Operating System, or COS, the software can run on PCs, tablets and smartphones and has been based on the open-source Linux operating system. Chinese media say that the OS has been created “entirely independently” in order to provide better localization for a range of features – from Chinese-language keyboards, to integration with the country’s banks. At the launch of the event, one of the developers involved with the project reportedly criticized Western software , saying that Apple’s iOS was too closed, that Google’s Android OS suffered from fragmentation (ie, too many versi...
Post a Comment
Read more