Promoter pledged shareholding continues to fall; Adani Ports, Sun Pharma promoters trim pledges

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Updated: August 12, 2021 12:42 PM

The value of pledged promoter holdings as a percentage of the value of total promoter holdings fell to 1.61% in the April-June quarter from 1.64% in the January-March quarter.

pledged shareholdingsPromoters of listed companies continued to cut pledged shareholdings in the first quarter of the current financial year. (Image: REUTERS)

Promoters of listed companies continued to cut pledged shareholdings in the first quarter of the current financial year. Data sourced by domestic brokerage and research firm Kotak Securities showed that the value of pledged promoter holdings as a percentage of the value of total promoter holdings fell to 1.61% in the April-June quarter from 1.64% in the January-March quarter. The April-June quarter was the second consecutive quarter with no BSE 500 company having more than 90% of its promoter holdings pledged.

At the end of June this year, promoters of only 78 of all the BSE 500 companies had pledged part of their holdings. “The value of pledged promoter holdings was Rs 1.7 lakh crore at end-June 2021, which is about 0.81% of the total BSE-500 Index’s market capitalization,” Kotak Securities said. High promoter pledging is not an indication of financial stress for a company. Banks often seek additional security in the form of promoter shares.

Pledged shareholding reduces

– At the end of June 2021, no BSE 500 company had more than 90% of their promoter shareholdings pledged.
– Companies in which pledged promoter holdings fell: Crompton Greaves Consumers, Max Financial Services, Dish TV, Edelweiss Financial Services and Gateway Distriparks, among others.
– Promoters of 78 companies in the BSE-500 Index pledged part of their holdings in the April-June quarter.
– Nifty-50 companies where promoter pledged holdings fell: Adani Ports & SEZ, Asian Paints, JSW Steel and Sun Pharmaceuticals.

Nifty 50 companies with over 5% pledged promoter holdings

-IndusInd Bank – 45.5% pledged, up from 36% in Jan-Mar quarter
-JSW Steel – 14.8% pledged, down from 17.7% in Jan-Mar quarter
-Adani Ports & SEZ – 14.4% pledged, down from 16% in Jan-Mar quarter
-Asian Paints – 9% pledged, down from 9.4% in Jan-Mar quarter
-Sun Pharmaceuticals – 6.4% pledged, down from 8.6% in Jan-Mar quarter

The value of IndusInd Bank’s pledged shareholding stands at Rs 5,400 crore, while that of JSW Steel is at Rs 10,700 crore, and for Adani Ports is Rs 13,200 crore.

Companies with the highest promoter pledges as a percentage of their holding

-Suzlon Energy – 88.5% promoter holding pledged
-Future Consumer – 88.4% promoter holding pledged
-GMR Infrastructure – 74.9% promoter holding pledged
-Max Financial Services – 62.2% promoter holding pledged
Sterling Wilson – 54.7% promoter holding pledged

Highest value of pledges

*Hindustan Zinc – Rs 21,200 crore
*Asian Paints  – Rs 13,700 crore
*Adani Ports & SEZ – 13,200 crore
*JSW Steel – Rs 10,700 crore

Companies that increased pledges significantly

– Johnson Controls made fresh pledges in the quarter, totalling 32.3% of the entire promoter holdings.
– Wockhardt increased pledged shareholding to 34.4%, up from 18.7%.
– IndusInd Bank increased pledged shareholding to 45.5% from 36%.
– S H Kelkar and Company increased pledged shareholding to 6%.
– GMR Infrastructure pledged shareholding increased to 74.9% from 72.8%.
Apollo Hospitals Enterprise pledged shareholding increased to 30% from 27.9%.

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