The pledging of shares by promoters of NSE companies dropped to a six-year low in June following increased regulatory scrutiny and the negative sentiment attached to this by investors. Promoters of about 75 large and midcap companies including Sterlite TechnologiesNSE -0.80 %, Adani Ports, GMR Infra, Emami, Indiabulls Housing, Indiabulls Real Estate and Jubilant FoodWorks redeemed pledged shares in June amid liquidity stress and a drop in stock prices.
“Given recent developments, both p ..
The Securities and Exchange Board of India (Sebi) last month said detailed reasons will have to be provided for pledging more than 20 per cent of the share capital or 50 per cent of the promoter holding. There’s also a closer watch on mutual funds’ exposure to loan against share (LAS) schemes. The percentage of pledged promoter holdings in NSE companies fell to a six-year low of 10.2 per cent at the end of June, according to Prime Database
Seven companies — Sterlite Technologies, Mangalam Drugs & Organics, Himatsingka Seide, Indiabulls Real Estate, Indiabulls Housing Finance, Byke Hospitality and Cigniti Technologies — slashed pledged shares to zero in June.
Anil Agarwal-led Sterlite Technologies redeemed pledges worth Rs 3,400 crore last month. Indiabulls Housing and Emami redeemed pledges worth Rs 760 crore and Rs 610 crore, respectively, in June.
Investors look askance at high pledge levels as a downturn i ..
In value terms, promoters’ share pledging declined by 7.18 per cent to Rs 1.95 lakh crore on June 30 compared with Rs 2.09 lakh crore on May 31, according to Prime Database. As a percentage of total market capitalisation of all NSE listed companies, pledged promoter shares dropped from 1.40 per cent in May to 1.33 per cent in June.
“After a few instances of chaos where promoters pledged their shares to take debt in unlisted companies to fund other businesses, mutual funds have forced pr ..
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