Don't Ignore The Fact That This Insider Just Sold Some Shares In Grasim Industries Limited (NSE:GRASIM)

By
Simply Wall St
Published
February 25, 2022
NSEI:GRASIM
Source: Shutterstock

We note that a Grasim Industries Limited (NSE:GRASIM) insider, Bajrang Bardia, recently sold ₹1.7m worth of stock for ₹1,722 per share. That might not be a huge sum but it was 100% of their personal holding, so we find it a little discouraging.

Check out our latest analysis for Grasim Industries

Grasim Industries Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Krishna Maheshwari, for ₹46m worth of shares, at about ₹1,525 per share. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of ₹1,544. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 11% of Krishna Maheshwari's holding.

In the last year Grasim Industries insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NSEI:GRASIM Insider Trading Volume February 25th 2022

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership of Grasim Industries

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 0.4% of Grasim Industries shares, worth about ₹4.2b. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Grasim Industries Tell Us?

Insiders sold Grasim Industries shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But it is good to see that Grasim Industries is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 2 warning signs for Grasim Industries (1 is a bit concerning!) that we believe deserve your full attention.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

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