The value of shares pledged by promoters of BSE-listed companies reached over ₹3 lakh crore in December, an increase of 9 per cent since the preceding month, according to exchange data.
The value of pledged shares stood at ₹2.78 lakh crore in November-end. It was at ₹2.81 lakh crore and ₹2.6 lakh crore at the end of October and September, respectively.
Till December 2017, pledging of shares by promoters was seen in as many as 3,003 out of 5,066 BSE-listed companies.
Share pledging is typically done by promoters to raise funds either for the same company or for financing other projects.
High pledging levels are not considered a good sign by investors as a downturn in the market price can lead to invocation and change in management. Further, decline in the level of share pledging may indicate scaling down in stress.
According to BSE data, promoters of 447 companies pledged up to 30 per cent of their respective holdings to the tune of ₹1.54 lakh crore, while 139 firms saw 30-50 per cent of the promoters’ holding worth ₹84,474 crore being pledged in December.
Further, there were 81-odd companies in which 50-75 per cent of the promoter-holding worth ₹31,164 crore was pledged.