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Pledging of shares by promoters in 1,517 NSE-listed companies (including companies with no pledging) hit 7-year high as on 30th June 2016, according to Pranav Haldea, Managing Director of Prime Database.
The percentage of promoters’ holding pledged went up from 15.57 per cent a year ago to 16 per cent on 30th June 2016 and further up to 16.21 per cent as on 11th August 2016.
In value terms too, promoters’ share pledging saw an increase of 11.29 per cent on a year-on-year basis with the value of pledged shares going up to Rs 1.98 lakh crore as on 30th June 2016, which further increased to Rs.2.08 lakh crore in August.
As a percentage of total market capitalisation too, it went up from 8.39 per cent a year ago to 8.51 per cent and further increased to 8.64 per cent in August.
As on 30th June 2016, shares were pledged in as many as 509 of the 1,517 NSE-listed companies (further increased to 522 companies on 11th August 2016), up 2.6 per cent (from 496 companies a year ago).
Rise in or high pledging of shares is not considered as a good sign for investors as correction in the market price can lead to invocation and change in management, said Haldea.
According to Prime Database, there were as many as 31 companies in which the complete holding of the promoters was under pledge as on 30th June 2016.
Top five companies by value of pledged shares are Tata Consultancy Services, Adani Ports and Special Economic Zone,Cairn india, Zee Entertainment Enterprises and JSW Steel.
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