Home Market Promoters pledged holdings drop to 7.8% in December quarter: Report

Promoters pledged holdings drop to 7.8% in December quarter: Report


NEW DELHI: The average shares pledged by promoters of top 500 companies listed on the BSE dropped to 7.8 per cent in October-December from 8.3 per cent in the preceding three months, according to a report by Kotak Institutional Equities Research.

Promoters pledged shares worth Rs 1.98 lakh crore, about 1.47 per cent of the total BSE-500 Index's market capitalisation in December 2017.

According to the report, promoters of 129 companies pledged their holdings among BSE-500 index stocks, with nine firm, having more than 90 per cent of their promoter holdings pledged.

The companies whose promoters pledged more than 95 per cent of their holdings are Bajaj Hindustan, CG Power and Industrial, Reliance Naval and Engineering, JBF Industries, Suzlon Energy, IL&FS Transportation Networks and Fortis Healthcare, the report noted.

"The percentage of promoter pledged holding reduced to 7.8 per cent in December from 8.3 per cent in September," the report noted.

During the quarter under review, promoters of Granules India, Future Lifestyle, Reliance Communications, Crompton Greaves Consumer and Bombay Burmah were found to have decreased their pledged holdings.

On the other hand, the highest increase in promoters' pledged holdings was witnessed in companies like JSW Steel, DB Corp, Mcleod Russel, Max Financial Services and Reliance Power.

"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 added.

Companies in the Nifty-50 with more than 5 per cent of pledged promoter holdings are Adani Ports & SEZ (24.7 per cent), followed by Asian Paints (14 per cent ), Indiabulls Housing Finance (12.5 per cent), M&M (5.8 per cent), Tata Motors (5.3 per cent) and Zee Entertainment (45.7 per cent), the report noted.

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