Value of promoter pledges dips in June quarter

An analysis of pledged holdings of BSE-500 stocks shows that the value of the promoter (majority shareholder) pledged holding as a percentage of promoter holding declined to 1.5% in the June 2022 quarter from 1.7% in the previous quarter.

Promoters of 81 companies in the BSE-500 index have pledged part of their holdings in the quarter under review. Only three companies – Thyrocare Technologies, Max Financial Services and Suzlon Energy – had more than 80% of their promoter holdings pledged, data from Kotak Institutional Equities show.

The value of pledged promoter holdings stood at Rs 1.7 trillion, which is about 0.77% of the market capitalization of the BSE-500.

Companies in the Nifty-50 with more than 5% of pledged promoter holdings include Adani Ports & SEZ (13.1%), Apollo Hospitals (16.4%), Asian Paints (11%), IndusInd Bank (45.5%) and JSW Steel (16.8%).

Firms that saw substantial increase in pledged promoter holdings include Medplus Health Services, Sterling & Wilson, Jindal Steel & Power, Sobha and Strides Pharma Science. Companies in which pledged promoter holdings declined include Lemon Tree Hotels, Adani Power and Sun Pharmaceuticals.

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Fresh promoter pledges were seen in Cyient and Elgi Equipments.

Pledging of shares does not necessarily imply that a company or a promoter is under financial stress, as lenders could have sought additional security in the form of promoter shares.