Pledged promoter holdings fell for the second straight quarter in the quarter ended June, an analysis revealed.
Stake pledged by promoters fell to 2.47 percent by value as of June from 2.83 percent in March, according a report by Kotak Institutional Equities. The percentage of pledged holdings declined the most for CG Power & Industrial Solutions Ltd., Sterlite Technologies Ltd., Indiabulls Real Estate Ltd., Himatsingka Seide Ltd. and India Cements Ltd.
The promoters of 112 of the BSE 500 companies have pledged their holdings, the report said, adding that controlling shareholders of three companies—Reliance Infrastructure Ltd., Gayatri Projects Ltd., and Reliance Capital Ltd.—have pledged more than 95 percent of their holdings.
Promoters pledge their shares to secure loans to meet working capital requirements, fund other ventures or make acquisitions. Shareholding in a company is often used as collateral. The pledging, however, doesn't necessarily mean distressed financial state of a company or promoters.
Key Highlights
- Companies with the highest pledged holdings by promoters as a percentage of the total holdings included Jindal Stainless Ltd., Dish TV India Ltd. and Jindal Stainless (Hissar) Ltd.
- Companies whose promoters pledged for the first time include Lemon Tree Hotels Ltd., Orient Electric Ltd., Teamlease Services Ltd. and GHCL Ltd.
- Companies with the highest increase in pledged promoter holdings include Eveready Industries Ltd., Lemon Tree Hotels, Orient Electric, Chambal Fertilisers Ltd., and Jindal Steel and Power Ltd.
Pledged Promoter Holdings In Nifty 50
Companies with more than 5 percent of pledged promoter holdings include Adani Ports & Special Economic Zone Ltd. (32.1 percent), Asian Paints Ltd. (12 percent), IndusInd Bank Ltd. (26.3 percent), JSW Steel Ltd. (49.1 percent), Sun Pharmaceutical Industries Ltd. (11 percent) and Zee Entertainment Enterprises Ltd. (64 percent).
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