Top 30 cos where promoters increased pledged holdings in September quarter
Pledging of shares does not necessarily imply that a company or promoter is under financial stress.
Jubilant FoodWorks, Religare Enterprises, Edelweiss Financial Services, Future Lifestyle, Jindal Steel and Power and JSW Steel are some of the companies where the percentage of promoters’ pledged shares drop on a quarter-on-quarter basis, data culled by Kotak Securities showed.
Companies that went in for fresh share pledges during the quarter included Sterlite Technologies and Gateway Distriparks, while promoters revoked entire pledged holdings in three companies – Astral Poly Technik, Radico Khaitan and Century Plyboards.
Pledging of shares does not necessarily imply that a company or a promoter is under financial stress. Often, level of share pledges goes up when lenders seek additional security against credit advanced as security.
Pledging of shares is a process when company promoters keep their holdings with lenders as collaterals to raise debt.
Percentage of pledged promoters holding declined marginally to 9.1 per cent in September quarter from 9.2 per cent in the sequential quarter ended June 30, 2017.
Promoters pledged shares worth Rs 1.85 lakh crore, which is about 1.53 per cent of the total BSE500 market capitalisation, in September 2017.
Bajaj Hindusthan (100 per cent), CG Power (100 per cent), Reliance Naval (100 per cent), JBF Industries (99.80 per cent), Suzlon Energy (99.40 per cent), IL&FS Transportation (98.20 per cent), Fortis Healthcare (98.20 per cent), RattanIndia Power (96.40 per cent) and Videocon Industries (96.20 per cent) are some of the companies where promoters have pledged more than 95 per cent of their holdings.
Analysts say high level of share pledging is not a good sign. Most promoters have pledged shares to raise working capital or bring in new investors or meet bankers requirements for collaterals for funded and non-funded working capital.
Among the Nifty50 companies, Adani Ports & SEZ (25.3 per cent), Asian Paints (14 per cent), Indiabulls Housing Finance (12.5 per cent), Tata Motors (5.6 per cent), Tata Steel (5.7 per cent) and Zee Entertainment (46.6 per cent) had more than 5 per cent of promoter holdings pledged with lenders.
Any changes in pledged holdings post September 2017 were not considered in this article.