In FY16, pledged shares accounted for 8.2% of total market capitalisation, higher than 4.9% in FY10, according to Prime Database.
High pledged shares are not a healthy sign as a downturn in the stock market can lead to invocation and change in management. As on March 31 this year, shares were pledged in 505 of the 1,514 NSE-listed companies, up from 492 companies a year before. There were 25 companies in which all the promoters’ share were pledged, 73 companies with more than 90% and 209 companies where 50% of the promoters’ share were pledged.
The maximum amount of shares were pledged to Kotak Group followed by Axis Group in the last one year.
