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Cash-strapped promoters of India Inc have increasingly pledged their stakes to raise funds during the last fiscal.
Data from Prime Database showed a 27 per cent increase in pledges to Rs 1.94 lakh crore as on March 31, 2015, by 495 NSE listed companies (Rs 1.52 lakh crore as on March 31, 2014 by 482 companies). The percentage of promoters holding pledged shares has also gone up from 41.75 to 43.36 during the period.
Pranav Haldea, MD of PRIME Database, said “it was expected that the promoters' pledged stakes would come down as higher share prices would create enough comfort zones for lenders. However, this has not happened. Ironically, the need for promoters to pledge their shares should have been high in 2012-13 and 2013-14, when many companies were cash-strapped and finances were difficult to raise.”
Reliance Inceptum, promoter of Reliance Capital, pledging 2.90 crore shares on 6{+t}{+h}August 2014 to Axis Trustee Services, was the largest pledge created during the year. The value of the pledged shares was Rs 1,688 crore.
Overall, shares of promoters of 245 companies were pledged during FY15.
Similarly, the largest release of pledged shares was done by Hinduja Automotive Ltd, promoter of Ashok Leyland, on February 19, 2015. They released 26.4 crore shares worth approximately Rs 1,851 crore.
Overall, shares of promoters of 205 companies were released during FY15.
Cairn India (Rs 15,801 crore) Adani Enterprises (Rs 7,976 crore), TCS (Rs 7,302 crore), JSW Energy (Rs 6,305 crore), Asian Paints (Rs 5,366 crore), Zee Entertainment Enterprises (Rs 5,318 crore), United Breweries (Rs 5,003 crore), Adani Power (Rs 4,282 crore), GMR Infrastructure (Rs 4,209 crore) and Apollo Hospitals Enterprise (Rs 4,173 crore) were the top 10 companies in terms of value of shares pledged.
As many as 49 companies saw the pledged shares of their promoters being invoked by their lenders last year. Prominent among them were United Spirits (Rs 2,348 crore worth of shares invoked), Bhushan Steel (Rs 462 crore), Cox & Kings (Rs 382 crore), Pipavav Defence & Offshore Engineering (Rs 111 crore) and Gujarat NRE Coke (Rs 90 crore).
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