Even as the government?s focus in the Satyam Computer Services saga moves to Maytas Infra and other group firms, it emerges that the promoters of Nagarjuna Construction Company Ltd-a firm that has partnered Maytas Infra for several infrastructure projects, including the Rs 1,590-crore Machalipatnam Port Project?have pledged 9.23% out of their 24.37% stake in the firm with financiers. However, unlike other companies where promoters have pledged shares, large investors have begun asking questions about the motive behind the pledges at Nagarjuna Construction.

On Monday, over a month after Satyam?s arrested founder B Ramalinga Raju confessed to the country?s largest-ever corporate fraud, his Maytas Infra disclosed that the Rajus had pledged their entire 15.14% stake in the company with lenders. On Wednesday, one of the lenders, Sicom, said it has sold 50 lakh Maytas shares pledged with it.

Half the 30 promoters listed as part of the promoter group for Nagarjuna Construction have pledged over 52.29% of their shares, according to a disclosure made to stock exchanges on Tuesday. Holding company AVSR Holdings Pvt Ltd has pledged more than half of its 7.94% stake in the firm. One of the promoters of Nagarjuna, Alluri Narayana Raju, who has pledged only a fraction of his 1.79% shares in the firm, told FE, ?It?s a routine transaction to raise capital for projects. As and when we can redeem them, we will.?

Nagarjuna Construction executive vice-president (finance) YD Murthy told FE, ?The pledging of shares by the promoters has been done primarily to raise funds to raise their stake in Nagarjuna. The promoters have increased their stake by over 2% in the last six months.?

Nagarjuna as of December 31 had prominent institutional investors such as Blackstone, ICICI Prudential Life Insurance, HDFC Mutual Fund, HSBC Global, Citigroup Global as well as India?s biggest stock exchange bull, Rakesh Jhunjhunwala. Foreign investors held over 26% in the company at the time.

?In companies like Asian Paints, promoters have been raising their stakes by pledging shares for years. But investors are confident they won?t be siphoning off those funds and disappearing. Is Nagarjuna the same as Asian Paints? I don?t think so,? said the chief investment officer of one of the 14 institutional investors with a stake of over 1% in Nagarjuna.

?When I see promoters pledging shares, I am scared. At best, it dilutes their interest in the firm and at worst, they could be siphoning off money. We will ask the promoters why they have pledged shares and how are they going to redeem them,? said another fund manager invested in the firm.

?Several infrastructure companies have disclosed pledged shares of over half their holdings in recent days. Most of them may have raised the cash to buy property around the projects they are implementing. Post-Satyam, our tolerance levels for small and medium companies has come down and we have begun asking tough questions,? points out the chief investment officer.

Nagarjuna is partnering Maytas Infra in a slew of road, power and port projects.

?We are conducting a project-wise review. In four road projects and one hydropower project, we have already achieved financial closure. Where projects haven?t yet achieved financial closure, in case Maytas is unable to bring further equity to complete the projects, we are ready to bring equity and close the project. This is the comfort we are giving lenders,? said Murthy.

Nagarjuna is facing trouble on another front. It is one of the firms under ?close review? by National Highways Authority of India for delaying the construction of a 485-km stretch from Lucknow to Muzaffarpur on NH-28 being developed through a $620-million loan from the World Bank. The company, however, asserts that delays in land acquisition and forest clearance led to the hold up.