With lenders invoking their pledged shares in Gitanjali Gems, the promoters’ holding in the company fell to 39.28% at the end of the September quarter from 55.02% in the June quarter.
Macquaire Finance invoked 50 lakh shares of the Mumbai-based company in July as reported on the exchanges. The brokerage has seen its holding in Gitanjali Gems rise to 5.43% in the September quarter from 3.26% in the previous quarter. “The fall in promoter holding is due to the pledged shares being invoked,” a top-management official confirmed on the condition of anonymity.
Apart from a fall in promoter holding, foreign institutional investors (FIIs) have pared their holdings in the jewellery-maker to 19.22% in the September quarter from 21.65% in the June quarter. Domestic institutional investors (DIIs) have also marginally cut their stake to 5.75% from 5.77% during the same period.
Shares of Gitanjali Gems plummeted about 77% in the September quarter owing to concerns surrounding the change in gold import norms and their impact on the company's financials. The high proportion of pledged shares has also concerned investors. As on September 30, 21.78%, or 78 lakh shares, of the promoters’ holdings were pledged.
As on March 2013, Gitanjali Gems’ total debt amounted to R5,239 crore.
Market experts are bearish on the stock. “Investor value usually deteriorates in companies where promoters pledge a huge amount of their shares. Gitanjali Gems is a cash-strapped company. It has a huge debt and doesn’t look in a position to repay it. It also has issues on the working capital front,” an analyst said on the condition of anonymity.
Apart from concerns over promoters pledging shares, Gitanjali Gems, together with Prime Broking, has come under the scanner for suspicious trading activity in the scrip. Sebi has banned Gitanjali Gems promoter Mehul Choksi from trading on the exchanges.