The percentage of shares pledged by promoters dropped to 7.8 per cent in the December quarter over the previous quarter’s 8.3 per cent, a new study revealed.

According to a research by Kotak Institutional Equities, this is the lowest in the last nine quarters.

The study reveals that pledged holdings of BSE 500 Index stocks promoters stood at ₹1.98 lakh crore, which is about 1.47 per cent of the total BSE 500’s market capitalisation in December 2017. While promoters of 129 companies pledged their holdings among BSE 500 Index stocks, nine had more than 90 per cent of their promoter holdings pledged.

Companies whose promoters pledged more than 95 per cent of their holdings are Bajaj Hindusthan, CG Power and Industrial Solutions, Reliance Naval and Engineering, JBF Industries, Suzlon Energy, IL&FS Transportation Networks and Fortis Healthcare.

In fact, promoters of Bajaj Hindusthan, CG Power and Industrial Solutions and Reliance Naval and Engineering have pledged their entire stake (100 per cent) with financial institutions.

Clarification

“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,” the brokerage house said.

Companies such as JSW Steel, DB Corp, McLeod Russel, Max Financial Services and Reliance Power witnessed the highest increase in promoters’ pledged holdings.

Reliance Communications promoters’ pledged share-holdings decreased to 32.5 per cent from 64.5 per cent.

Promoters who decreased their pledged holdings include Granules India, Future Lifestyle, RCom, Crompton Greaves Consumer and Bombay Burmah, the study said.

While Granules India saw its pledged promoter holding decrease to 31.6 per cent from 78.1 per cent, Future Lifestyle’s revoked their pledged shares to 12.1 per cent from 49.8 per cent.

Adani leads in value terms

While SRF has entered the list of promoters’ pledged holdings afresh, promoters of Astron Microwave and GE Shipping had revoked their entire pledging.

Adani Ports and SEZ topped the pledged shares list in value terms at ₹13,600 crore, followed by JSW Steel (₹13,000 crore) and TCS and Zee Entertainment Enterprises (₹11,000 crore each).

The promoters of Adani Ports pledged 65.8 per cent of their holding, while those of JSW Steel, TCS and ZEEL pledged 41.7 per cent, 73.6 per cent and 43.1 per cent holdings, respectively.

Nifty-50 companies

Among the Nifty-50, companies that have more than 5 per cent of pledged promoter holdings are: Zee Entertainment (45.7 per cent), Adani Ports & SEZ (24.7 per cent), Asian Paints (14 per cent), Indiabulls Housing Finance (12.5 per cent), M&M (5.8 per cent) and Tata Motors (5.3 per cent).

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