Photo: Aniruddha Chowdhury/Mint
Photo: Aniruddha Chowdhury/Mint

Promoters’ pledging of shares at a seven-year high

For NSE-listed companies, including companies with no pledging, shares pledged by promoter as a percentage of promoters' holding rose to 16% for the June quarter

Mumbai: Shares pledged by promoters in companies listed on the National Stock Exchange (NSE) rose to a seven-year high at the end of June quarter, hinting at a rise in financial distress.

For the NSE-listed companies, including companies with no pledging, shares pledged by promoter as a percentage of promoters’ holding rose to 16% for the quarter ended 30 June from 15.57% a year back and thereafter increased to 16.21% as on 11 August.

When compared in value terms, promoters’ share pledging rose 11.29% to 1.98 trillion as of 30 June, from a year before, and it thereafter, increased to 2.08 trillion as on 11 August.

Around 31 companies saw promoters pledge 100% of their holding as of 30 June 2016, while 79 companies saw promoters pledge 90% of their holding. There were 212 companies in which more than 50% of the promoter’s shareholding was pledged.

Tata Sons Ltd, the holding company of Tata Consultancy Services, saw the biggest pledge creators, raising 3,902 crore by pledging 1.70 crore shares to Life insurance Corporation of India (through Centbank Financial Services) from 1 July 2015 to 30 June 2016,

On the other hand, the largest release of pledged shares transaction was by Vinod Shantilal Adani, one of the promoters of Adani Ports & Special Economic Zone Ltd. amounting to 2,359 crore as he released 73 million shares.

At the same time, shares of promoters of as many as 45 companies were invoked in the last one year. The company in which the maximum value of shares were invoked during last one year was United Breweries Ltd, where shares worth 442 crore were invoked.

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