Rakesh Jhunjhunwala cuts nearly 3% stake in this company - check what expert has to say

As the financial year 2020-21 ended, companies are coming out with their shareholding pattern. In this regard, the ace investor, who is also known as the Big Bull of Indian stock market, Rakesh Jhunjhunwala has trimmed his stake in the luggage bags manufacturing company — VIP Industries.  

Rakesh Jhunjhunwala has sold as much as 2.99 per cent or 4.22 million shares in this company, bringing down his own stake to 0.7 per cent. However, his wife Rekha Jhunjhunwala still continues to hold 1.62 per cent of the stake in the VIP Industries. 

According to VIP Industries' shareholding pattern as of March 2021, both Rakesh Jhunjhunwala and his wife hold a 2.32 per cent stake in the company. They both used to hold 5.31 per cent stake in the company till December 2020, the data is available on the exchanges. 

Exactly a year ago, Jhunjhunwala along with his wife had increased the stakes in VIP Industries in January-March quarter 2020 from 5.1 to 5.32 per cent. 

VIP Industries manufactures a large number of luggage and travel accessories under various renowned brands like VIP, Aristocrat, Alfa, Footloose, Sky bags among others. The company had been impacted most amid covid pandemic due to which travel was completely restricted. 

Since the last three quarters, VIP Industries has been reporting losses and could be the reason for Rakesh JhunJhunwala’s stake cut in the company, says Tradeswift Director Sandeep Jain. 

The market analyst explains, Rakesh Jhunjhunwala had trimmed his stake couple of months ago, but it’s getting public now and that could also be the reason that VIP industries was under correction for the last few months, and it has been consolidated. He expects, VIP to post good result this quarter (Q4FY21) however, the impact of this news could largely be seen in the first quarter of FY22.