With the increase in pledged shares, the total value of promoter pledged holdings was recorded at Rs 1.8 lakh crore at the end of the previous quarter.
Pledged shares as a percentage of total holding also increased during the previous quarter to 1.04%, up from 1.02%.
Promoters’ pledged shareholding in BSE 500 companies increased to 2.09% at the end of fiscal third quarter, from 2.03% in the previous quarter. “Promoters of 84 companies in the BSE-500 Index had pledged all or part of their holdings in the December 2020 quarter,” a report by domestic research and brokerage firm Kotak Securities said. With the increase, the total value of promoter pledged holdings was recorded at Rs 1.8 lakh crore. However, it is important to note that higher promoter pledges do not necessarily indicate that promoters are under financial stress.
Pledged shares as a percentage of total holding also increased during the previous quarter to 1.04%, up from 1.02%. The report highlighted that only one of the 500 firms reviewed had more than 90% of its promoter holdings pledged. There were two such companies in the previous quarter, and four in the same period a year ago.
Only one firm with over 90% promoter holding pledged
Future Consumer was the company with the highest promoter pledging at 95.5% at the end of December 2020, up from 91.2% in the July-September quarter. The value of pledged holding is estimated to be Rs 580 crore. Data showed that Suzlon Energy’s promoters have pledged 88.5% of their holdings, valued at Rs 820 crore at the end of the previous quarter. Max Financial Services had the third-highest promoter pledging at 87%, valued at Rs 3,510 crore. Max Financial Services promoters had 90% of their holdings pledged in the fiscal second quarter. In terms of value, Adani Ports & SEZ’s pledged shares are estimated to be worth Rs 23,900 crore.
Who increased, decreased pledges
Pledged holding as a percentage of total shareholding was the highest at Omaxe at 49.3%, according to Kotak Securities. This was followed by GMR Infrastructure, Sterling & Wilson, and Future Consumer. The least pledged holding of the total shareholding was recorded at JSW Steel at just 9.7%, followed by Swan Energy, United Breweries, and Sobha — all at 10%.
Firms, where promoters increased their pledged holdings, include Adani Ports & SEZ, up 7.3%, followed by Future Consumer with an increase of 4.3% and Strides Pharma Science up 3.3%. The largest decrease in promoter holding came at Dish TV, a reduction of 14.1%, followed by Lemon Tree hotel, Wockhardt, Time Technoplast, and India Cements, all reducing pledges in double digits.