The Hindu Business Line : IT honchos cash in on bull run

THE recent bull run on the markets has seen a rush to sell of a different kind. Several promoters, directors, top executives of Corporate India have added millions to their kitty by selling part of their holdings over the last few weeks.

The rush to sell is led by the officials of the technology sector, a key component of the bull run.

Prominent officials who have either exercised their stock options or offloaded part of their holdings in the recent past include Wipro's CEO Mr Vivek Paul, CFO Mr Suresh Senapathy, Infosys Technologies Director and CFO Mr Mohandas Pai, Larsen & Toubro CMD Mr A.M. Naik, and CFO Mr Y.M. Deosthalee, among others.

The NSE is flooded with the notices sent by several of the corporates informing of the stock sale by their senior officials.

As the BSE Sensex traded around historic highs in the recent sessions, there was a rush from software professionals to encash stock options.

Sources said that exercising options was not new for IT professionals, but they couldn't have zeroed in on a more opportune time than the current market boom.

Over the last 3-4 months, Mr Vivek Paul has sold about eight lakh shares including close to three lakh American Depository Shares (ADSs) by exercising his stock options.

Similarly, Mr Suresh Senapathy has encashed some 3,300 stock options by selling ADSs overseas.

On November 22, Mr Mohandas Pai sold some 10,000 shares. His current shareholding in Infosys stands at 3,64,696 shares.

Technology stocks have gained the most in the recent past with IT companies posting impressive results, backed by a strong outsourcing boom.

This, coupled with the strong flows from the FIIs, has driven the Sensex to above 6,000 levels.

Foreign funds have been active buyers of Indian assets this year, with share purchases around a record $7.5 billion in 2004.

While stocks like Wipro have gained 40 per cent, Infosys has seen a rise of 44 per cent since early July.

Even a small IT company like Aztec has seen stock appreciation of 231 per cent since early July.

Officials of small and mid-sized IT firms like Aztec, Kale Consultants and Hughes Software have rushed to encash their options.

Mr V.R. Govindrajan, Wholetime Director and CTO of Aztec, sold one lakh shares on November 29.

Mr Vipul Jain, Managing Director of Kale Consultants, sold 50,000 shares on November 15.

Over half a dozen senior officials of Hughes Software Systems have encashed part of their stock options.

Selling in the booming market is not confined to the IT sector alone.

Top executives of L&T, Mahindra & Mahindra, ITC and ACC, among others, have also sold some of their stake.

Bulk of the offloading has happened towards the second half of November.

Mr A.M. Naik, L&T Chairman and MD, sold 1,650 shares on November 29, while CFO Mr Y.M. Deosthalee sold 5,000 shares on November 25.

ITC's Wholetime Director Mr S.S.H. Rehman sold 3,000 shares on November 24.

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