Promoters’ pledged shareholding increases to 2.09% in Q3; pledged value reaches Rs 1.8 lakh crore

By: |
Updated: Feb 09, 2021 10:05 AM

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.

stock market, Sensex, promotersPledged shares as a percentage of total holding also increased during the previous quarter to 1.04%, up from 1.02%. (Image: REUTERS)

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.

Among firms that had negligible promoter pledged holdings included Cholamandalam Financial, Coromandel International, EID Parry, Finolex Industries, MRF, S H Kelkar and Company, and Star Cement.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Share Market LIVE: Sensex, Nifty set to open strong; Nureca shares to list on stock exchanges today
2Bonds sell-off: RBI governor asks markets for trust
3Jio increases its revenue market share in Dec qtr