The percentage of pledged promoter (majority shareholder) holdings among BSE-500 companies declined in the March 2018 quarter to 7.4 per cent in comparison to 7.8 per cent in the December quarter, Kotak Institutional Equities pointed out in a report.

Promoters of 128 companies pledged their holdings among BSE-500 Index stocks worth Rs 1.8 lakh crore, which was about 1.43 per cent of the total BSE-500 index market capitalisation in the March 2018 quarter. Six companies had more than 90 per cent of their promoter holdings pledged.

Companies whose promoters pledged more than 90 per cent of their holdings are Bajaj Hindustan, CG Power and Industrial, Reliance Naval and Engineering, JBF Industries, Suzlon Energy and IL&FS Transportation Networks.

Highest increase in pledged promoter holdings was witnessed in Kwality, Centrum Capital, Emami, Granules India and Adani Ports & SEZ. Companies, in which pledged promoter holdings declined, were Fortis Healthcare, Shree Renuka Sugars, Jubilant Life Sciences, Swan Energy and Jubilant Foodworks.

Fresh promoter pledges happened in UPL, while the promoters of SRF and S H Kelkar revoked their entire pledged holdings.

Companies in the Nifty-50 with more than 5 per cent of pledged promoter holdings were Adani Ports & SEZ (34.3 per cent), Asian Paints (13.2 per cent ), Indiabulls Housing Finance (12.5 per cent ), M&M (5.8 per cent ), Tata Motors (5.3 per cent ) and Zee Entertainment (52.6 per cent).

It should be noted 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 promoter shares.

Related Topics
comment COMMENT NOW