The proportion of pledged shares as a percentage of total promoter shareholding within the BSE-500 pack decreased from 0.87% in the September quarter to 0.84% in the December quarter, according to Kotak Institutional Equities.
Nearly 70 companies' promoters pledged shares, totaling Rs 1.63 lakh crore, or about 0.4% of the BSE-500's market capitalisation, an analysis by the brokerage found. The percentage of promoters' pledged holdings has declined for six consecutive quarters since September 2023.
Notably, the latest sequential decline corresponds with a sharp market correction since the September-end peak.
It's important to note that share pledging doesn't automatically indicate financial distress as lenders may request it as additional collateral.
According to the Kotak report, companies in which pledged promoter holdings increased include IndusInd Bank Ltd., Anand Rathi Wealth Ltd., Ashok Leyland Ltd., Anupam Rasayan Ltd. and Laurus Lab Ltd., among others.
On the other hand, Swan Energy Ltd., Krishna Institute of Medical Sciences Ltd., Sun Pharma Advanced Research Ltd., Aurobindo Pharma Ltd. and Chambal Fertilisers Ltd., among others saw pledged promoter holdings decline.
In Sun Pharma Advanced Research and UPL Ltd., promoters released almost entire pledged holdings and sold stakes to repay debts, the note said.
Medplus Health Services Ltd. (Rs 2,210 crore), Chalet Hotels Ltd. (Rs 4,580 crore), and GMR Airports Ltd. (Rs 16,150 crore) have the highest pledged holdings in overall holdings.
In absolute value, the highest promoter pledge is of Vedanta Group company Hindustan Zinc Ltd. (Rs 17,250 crore).
Among the Nifty 50, companies with more than 5% of pledged promoter holdings include Apollo Hospitals Ltd. (13.5%), Asian Paints Ltd. (9.2%), IndusInd Bank (50.9%), and JSW Steel Ltd. (14.1%).
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