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There is a marginal increase in the number of companies where promoters have pledged shares in April-June quarter .
According to a study by Edelweiss Research, 721 companies (in a universe of 3,098 companies) have reported promoters’ pledge holdings during April-June 2016 compared with 699 (among 3,166 firms) in the previous quarter.
However, value of pledged holding rose to ₹2.28 lakh crore in Q1-FY17 compared to ₹1.85 lakh crore. in Q4-FY16. The rise was attributable to the robust secondary market in Q1 of current fiscal.
During the quarter, the BSE S&P Sensex gained and the Nifty- the BSE 500 and the NSE 500 have returned ***
A similar study by Kotak Institutions on BSE-500 stocks shows that the percentage of pledged promoter (majority shareholders) holdings has not increased much in June quarter in comparison to March quarter.
"The percentage of promoter pledged holding remained at 10.8 per cent in June 2016 versus 10.9 per cent in March," it said.
Promoters have pledged shares worth ₹1.5 lakh crore, which is about 1.6 per cent of the total BSE-500 Index’s market capitalisation in June 2016.
Promoters of 137 companies pledged their holdings in BSE-500 stocks, with nine companies having more than 90 per cent of their promoter holdings pledged. “We clarify that pledging of shares does not necessarily imply that a company or a promoter is under financial stress; banks (lenders) could have sought additional security in the form of promoters’ shares,” said Kotak's Sanjeev Prasad and Sunita Baldawa in the report.
According to Edelweiss study, from the universe of companies with market capitalisation above ₹1,000 crore, 53 have witnessed an increase in promoter pledging over the previous quarter. At the same time, 48 have seen partial revoke of the promoter pledged shares.
The prominent ones with increase in promoter pledging were PC Jeweller, Reliance Capital , Granules India and Adani Ports. Partial revoke was seen in Dish TV, GMR Infrastructure and Jindal Steel & Power, Edelweiss study has revealed.
Among the prominent companies where pledging of shares by promoters were higher include Crompton & Greaves (84.20 per cent), India Cements (76.40 per cent), Gayatri Projects (99.99 per cent) and Bajaj Hindusthan (100 per cent).
Similarly, among the companies where promoters revoked their pledging partially were Zee Entertainment, JSW Steel, Reliance Infrastructure and NCC.
Promoters who revoked their entire pledged holdings wee Amtek Auto, Star Ferro and Cement.
In the F&O universe, firms such as Reliance Capital, Adani Ports, Arvind and Reliance Power have seen incremental pledging activity by promoters between Q4-FY16 and Q1-FY17. Partial revoke was seen in GMR Infrastructure, Jindal Steel & Power, Tata Steel and Motherson Sumi.
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