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Shares in HCL Tech, India's fourth largest IT exporter, fell the most on the Nifty index Monday on the news that the company's vice chairman and CEO Vineet Nayar has sold 27 lakh shares held by him in the company for Rs 133.58 crore.
Nayar sold 27,00,000 equity shares of Rs 2 each (0.3896 per cent) held by him Friday. Post the transaction, his shareholding in the company has become nil.
Hitesh Shah, analyst at IDFC Securities told NDTV Profit today that in general management selling their stock is taken as negative from a sentiment perspective.
Typically, insiders selling shares is considered by the market as a lead indicator for the share price reaching a peak. HCL Tech’s current share price is Rs 490 and its yearly high is Rs 523.50.
Shares in the company traded with over 1 per cent losses at Rs 489.60 on the BSE at 11.32 a.m. In contrast, the BSE IT index was up 0.64 per cent.
"The next line in HCL Tech is not as strong as other IT companies," Shah said.
HCL Tech says: Nayar has been involved in philanthropic causes through his own NGO, Sampark, which he established in 2004. He had transferred part of his investments in HCL Tech to two trusts, who have now sold shares. The proceeds from sale of these shares, post tax, would go as endowments to the academic institutions Nayar has attended.
HCL founder Shiv Nadar is also an active philanthropist. In 2010, HCL Corporation sold a 2.5 per cent stake in the company to raise over Rs 581 crore, the proceeds of which were to be utilised for the Shiv Nadar Foundation.
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