Who a promoter is
A promoter is whoever founded or controls the company — usually a family, sometimes a parent company. They are shareholders like you, and they are also the people who decide what the company does.
Bharat Foods' promoters held all 80 lakh shares before it listed. In the 2019 issue they sold 5 lakh of their own, and the company created 20 lakh new ones. So they now hold 75 lakh of one crore: 75%, with the remaining 25% held by everyone else.
That is not an accident of arithmetic. A listed company must keep a minimum proportion in public hands, and 25% is the usual floor. Bharat Foods sits exactly on it.
Seventy-five, twenty-five
Tap each holder. The promoters are the only ones who appear on both sides of the company.
Concentration cuts both ways. Owners with most of their wealth in the company are unlikely to be careless with it — and are also difficult to outvote.
A promoter is a shareholder who is also on the inside. Both halves matter.
What insiders may and may not do
Knowing the results early is unavoidable — somebody has to prepare them. Trading on that knowledge before it is public is not. That is insider trading, it is an offence, and it is the reason companies close a trading window around results.
So insiders can buy and sell their own shares, but only in permitted periods and with disclosure. Those disclosures are public, which is why "promoter bought" or "promoter sold" appears in the news at all.
Read those with care. A promoter selling may be funding a house, a divorce or a tax bill. A promoter buying may be signalling confidence — or manufacturing the appearance of it. Neither is a verdict on the business.
Pledged shares. A promoter can borrow against their holding, and if the price falls the lender can sell those shares to recover the loan. That turns a falling price into forced selling, which pushes the price down further. A high pledge is a risk that has nothing to do with how the business is trading.
A promoter sells 2% of the company and discloses it. What have you learnt?
Promoters and institutions trade in large, deliberate blocks. But most of the orders crossing the exchange every second belong to somebody else entirely.