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Promoters share pledges fall slightly in March quarter

LiveMint logoLiveMint 16-05-2017 Nasrin Sultana

Mumbai: The percentage of pledged promoter holdings of BSE500 stocks fell marginally in the March quarter compared to the December quarter.

According to Kotak Institutional Equities, promoters of 135 companies among BSE500 Index stocks pledged their holdings during the March quarter, with seven companies pledging more than 90% of their promoter holdings, but that does not necessarily mean that the promoter or company is under any stress.

“The percentage of promoter pledged holding decreased to 9% in March 2017 compared to 9.3% in December. Promoters have pledged shares worth Rs1.8 trillion, which is about 1.6% of the total BSE500 Index’s market capitalization in March 2017. Pledging of shares does not necessarily imply that a company or a promoter is under financial stress; banks (lenders) could have sought additional security in the form of promoters’ shares,” it said in a report on 15 May.

According to the analysis, seven companies had more than 90% of their promoter holdings pledged in the BSE500 Index.

Promoters who pledged more than 95% of their holdings are Bajaj Hindusthan, CG Power and Industrial, Reliance Defence, Suzlon Energy, Videocon Industries and Rattanindia Power.

Promoters who decreased their pledged holdings include Future Consumer, Rain Industries, Reliance Power, Future Retail and Adani Power.

Companies which saw the highest increase in promoters’ pledged holdings were Granules India, KPIT Technologies, JBF Industries, Advance Enzyme, and CG Power and Industrial. Companies which saw fresh promoters’ pledges are Advance Enzyme, Eros International and SH Kelkar.

The companies in the Nifty50 with more than 5% of pledged promoter holdings are Adani Ports & SEZ (29.6%), Asian Paints (14.6%), Indiabulls Housing Finance (12.5%), Tata Motors (5.9%), Tata Steel (5.7%) and Zee Entertainment (39.3%).

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