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The percentage of pledged shares by promoters (with respect to their total holdings) declined to 2.83 per cent in March quarter from 2.98 per cent in the December 2018 quarter, according to a study by Kotak Institutional Equities. However, none of the promoters have revoked their pledge holdings entirely during the quarter, it said.
The report, which is based on an analysis of top BSE-500 listed firms, said percentage of pledged promoter holdings by value was highest at 3.28 per cent at the end of June 2017 quarter. From March 2018 quarter, it was hovering between 2.91 per cent and 2.78 per cent.
Outstanding pledged shares of promoters were at ₹1.95 lakh crore, which is about 1.38 per cent of the total BSE-500 Index’s market capitalisation in March 2019, the study found and added in all, promoters of 116 companies have pledged their holdings among the BSE-500 Index.
“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 promoter shares,” Kotak Institutions said in the statement.
According to it, six companies — CG Power and Industrial, Reliance Infrastructure, Reliance Capital and Sterlite Technologies, had more than 90 per cent of their promoter holdings pledged. Incidentally, on Tuesday, YES Bank acquired 12.8 per cent stake in CG Power by invoking the pledged shares. Companies such as JK Tyre & Industries, Reliance Capital, Reliance Infrastructure, Dish TV India and VA Tech Wabag saw the highest increase in pledged promoter holdings while Granules India, Strides Pharma, Reliance Communications, Coffee Day Enterprises and Bajaj Consumer Care saw pledging by promoter holdings declined, the report said.
Among the Nifty-50 constituents, Zee Entertainment leads with the highest pledge at 66.2 per cent, followed by JSW Steel at 46.3 per cent and Adani Ports & SEZ at 42.3 per cent. Indiabulls Housing Finance, Sun Pharmaceuticals and Asian Paints promotes too pledged in excess of five per cent among the Nifty-50 stocks.
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