ET Intelligence Group: In the largest block deal ever to be carried out in India, British drug company GlaxoSmithKline last week sold its entire 5.7% stake in Hindustan Unilever (HUL) for $3.3 billion, soon after the merger between HUL and GSK Consumer Healthcare.

The HUL stock hit a record high in mid-April and is now 16% lower from that level. In case the performance of the HUL stock continues to remain subdued in the coming months, it might just reinforce a trend: of multinational players exiting Indian stocks at the right time.

In April 2015, Japanese drug major Daiichi Sankyo exited India by selling its entire holding of 8.9% in India’s largest drug company, Sun Pharma, for $3.2 billion when the latter’s stock was still hovering near its record high level. The Sun stock lost more than half its value within two years of the Daiichi stake sale.

In 2017, German consumer goods firm Henkel did not exercise its option to pick up as much as a 26% stake in Jyothy Laboratories, the Indian FMCG company that had in 2011 purchased brands like Henko, Fa and Pril from Henkel India. In the hindsight, the decision of not investing worked for the German company, since the Jyothy stock has nearly halved since.

Shell India, the local arm of Royal Dutch Shell, through the open market sold 8.5% in Mahanagar Gas (MGL) in April 2018, a further 14% stake in August 2018 and the remaining 10% in August last year — soon after the threeyear lock-in period for a minimum promoter holding expired. MGL is trading range-bound at around the levels seen in 2018 and 2019.