Promoters continue to pledge shares in December quarter

Promoters of 14 companies have pledged nearly 100% of their holdings.

The stress on promoters is showing no signs of abating, as the percentage of pledged shares continued to rise in the December quarter. 

Analysis by the BS Research Bureau shows promoters of 14 companies pledged more than 90 per cent of their holdings in the December quarter (see list). 

Analysts believe this might not be a sign of concern but that banks might have sought additional security in the form of higher pledges from promoters. 

In the December quarter, the value of pledged shares (BSE 500) increased to Rs 1.64 lakh crore from Rs 1.54 lakh crore in the September quarter.

In percentage terms, pledged holding increased to 13.62 per cent in December from 12.6 per cent in September. Of BSE 500 companies, promoters of 142 companies have pledged their holding.  

IVRCL and Tree House pledged 100 per cent of promoter holdings, while others like Alok Industries have pledged 99.77 per cent of promoter holdings, and 99.72 per cent of promoter holding in Essar Ports has been pledged. 

According to Kotak Institutional Equities, the highest increase in promoters’ pledged holdings was seen in IVRCL, Edelweiss Financial Services, Reliance Infrastructure, IL&FS Transportation, Sadbhav Engineering and Rasoya Proteins.

Promoters who decreased their pledged holdings included Orchid Chemicals, Ballarpur Industries, Gati, Strides Arcolab, Lakshmi Vilas Bank, Radico Khaitan and Jyothy Laboratories. 

Promoters of Stride Arcolab completely revoked their pledged holdings during the quarter.