Stock promoters are individuals that help businesses raise capital by promoting stocks to potential investors. This way they convince investors to purchase the shares of the company.

To accomplish such things, they make different marketing strategies aiming to create market awareness about a company.

Promoters play an important role while the successful establishment of a startup. In return, they get paid with the proportion of equity share of that company.

Stock promoters use marketing strategy to promote a client's product or services in a way to create awareness of investment security to increase the security price.

What are Stock Promoters?

A stock promoter is a stock expert that does the sale of securities and in return he receives 10% or more of any class of securities. A stock promoter mostly hired by the startups which represents a stock.

Types of Promoters

Stock promoters can be classified as follows:

Penny Promoters

Penny promoters

Institutional Promoters

Promoter Specializing in Government Securities

Working of Stock Promoters

Promoters use several varieties of format to reach out to the potential investors. By doing that, they convince investors to buy securities.

Nowadays stock promoters use different tools to promote their work:

Mailing via Emails

Promoters send emails as promotional emails to numerous investors in order to make them aware about a new product that comes in the market.

Social Media and Chat Rooms

Stock promoters reach potential investors through certain demographics. They also take help through social media platforms such as Facebook, Instagram, Twitter, Reddit.

Reports and Investment Newsletter

Stock promoters make information rich reports which contain specific details where they promote stocks.

Online Advertisement

Pop us ads and other advertising ads may sound great as it has a great source to reach a wider audience.

What is Promoter Holdings?

To understand promoter’s holdings, let's take a suitable example:

A private company can have domestic investors, international investors, promoters. A public limited company includes retail investors along with domestic investors and international investors.

High Promoter Stake and Low Promoter Stake

One thing investors should keep in mind that promoters play a significant role in a company’s overall success and growth. They usually invest a lot in the company and also hold executive positions.
Should I buy stocks of companies with a higher promoter stock holding percentage?

Investors should consider the stocks which have high promoter holding and hence they are known as safer to invest than other stocks. The reason being if the promoters think the stocks will give outstanding returns in the near future, the possibility of the company doing well in the future is also high.

However, a company with a low promoter stake will have a low possibility regards to the company's growth.

Increasing and Decreasing Trends in Promoter Holdings

Here, we will discuss the increasing and decreasing trends in promoter’s holdings:

For instance, if XYZ Ltd has a promoter stake of 25% which is lower than many companies. However, the stake was 18% in the last year and 15% before that. Here, investors can get a clear indication that there is an increase of promoter interest in the company.

There is another company which is named as ABC Limited which has a promoter stake of 75%. This is higher than the industry average, but this could be a sign of an upcoming problem.


Promoter stakes help individuals find the future performance of a company. However, this is not a single factor investors should look upon. There are certain factors like management, financial, and other analysis should be considered before making any investment decision.

To get a deep insight into promoter’s holding, check out the Swastika Investmart’s page. Open demat account with Swastika and enjoy seamless share market trading services in a hassle free way.

Author's Bio: 

Stock promoters are individuals that help businesses raise capital by promoting stocks to potential investors. This way they convince investors to purchase the shares of the company.