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Our Bureau

Kolkata, Jan. 28 Voluntary disclosures have begun to trickle in before SEBI has made the necessary notification for mandatory disclosures by promoters regarding shares pledged by them.

The SEBI board on January 21 decided to make disclosures compulsory but has not yet spelt out how and when these are to be made.

Among the early disclosures were those of promoters of Godrej Consumer Products, United Spirits, MindTree, JSW Steel and Asian Paints.

According to market analysts, there may be a stream of disclosures after SEBI notifies the norms.

Mr Saurabh Mukherjea, head of investment advisory Noble, said a conservative estimates of around 5 per cent of promoters’ holdings could be pledged with financiers.

“Pledging of shares by promoters is material information for other investors in determining valuation of the company, as it indicates cash flow problem and also provides clues to promoters’ views on the company,” he added.

According to Mr Arun Kejriwal of KRIS, the practice of pledging shares to garner cash by promoters for their own interest has been widely prevalent. “But since the law did not provide for such disclosures, many could get away unnoticed,” he said.

However, Mr Kejriwal added that he would like to make a distinction between promoters with “honourable intentions” and others.

According to brokerage house Prabhudas Lilladher, promoters pledging their shares with financiers such as banks and NBFCs has become an important criteria for investors in making their investment decisions.

Last week, it ran a quick survey among a number of companies it tracks. It found out that a large number of companies responded by indicating that they could not confirm if promoters have pledged shares.

Nine companies gave the percentage of holdings pledged with financers.

The data revealed that KEI Industries (6 per cent), Nagarjuna Construction (12 per cent), Rolta (2.5), Great Offshore (14.88), Bharti Shipyard (5.45), Peninsula Land (14), Shree Sugar (10), Bombay Rayon (1.4) and XL Telecom & Energy (20 per cent) have pledged shares. Gayatri Projects and Indage Vinters did not mention how much (in percentage terms) was pledged.

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