The promoter pledged shareholding has taken centre stage in the recent past owing to carnage witnessed in some of the front line stocks having high pledged holding. Further, the ongoing COVID-19 led lockdown can only add to the worries for companies having high promoter pledge.
Therefore, it is important to keep a track on which of your invested companies have their promoter holding pledged. The below table depicts the companies in which the promoters have increased, decreased or maintained their pledged holding vis-a-vis last quarter. Our universe of stocks is all the companies in BSE500.
Before going through our table, let us understand why do promoters opt for it?
Promoter pledging their holding is never a good idea, but certain companies do opt for it to gain faster access to capital (keeping its share as collateral) in order to fulfil their obligations.
The money is either used by the promoter himself (to fund its other businesses or personal requirement) or it would be used for the company itself. In any case, it is not a good sign for any investor if the pledged holding exceeds 30% of the promoter holding in the business. The consequence of not repaying the debt can lead to the bank selling its shares in the open market leading to a sharp fall in stock prices.
Please note below table depicts change to the second decimal (which means even the slightest change is covered).
Increase in Promoter pledged holdings
In the march quarter, there were 45 companies in which promoters increased their pledged holding. Some of them include Sadbhav Engineering, Max Financial Services, Future Retail, Adani Ports & Special Economic Zone and Adani Enterprises.
|Max Financial Services||94.76||71.54||23.22|
|Adani Ports & Special Economic Zone||58.25||36.41||21.84|
|IRB Infrastructure Developers||17.58||0.25||17.33|
|Kalpataru Power Transmission||57.5||41.38||16.12|
|Parag Milk Foods||48.1||35.69||12.41|
|Jindal Steel & Power||74.8||65.58||9.22|
|D B Corp||40.4||33.82||6.58|
|Chambal Fertilisers & Chemicals||25.17||21.28||3.89|
|Motherson Sumi Systems||13.05||9.24||3.81|
|Sun Pharmaceuticals Industries||13.22||10.07||3.15|
|Edelweiss Financial Services||18.91||15.98||2.93|
|Strides Pharma Science||50.93||48.2||2.73|
|Jamna Auto Industries||2.05||0||2.05|
|Crompton Greaves Consumer Electrical||65.58||64.06||1.52|
|Mahindra & Mahindra||3.04||1.68||1.36|
|Sun TV Network||4.69||3.53||1.16|
|Godrej Consumer Products||0.66||0||0.66|
Promoter pledged holding maintained
Further, there are 39 companies in which promoters have maintained their pledged holding as compared to the December quarter. Some of the names include Dewan Housing Finance Corporation, Future Lifestyle Fashions, Jindal Stainless (Hisar), Jindal Stainless and Suzlon Energy.
|Dewan Housing Finance Corporation||100||100|
|Future Lifestyle Fashions||99.78||99.78|
|Jindal Stainless (Hisar)||87.7||87.7|
|Balrampur Chini Mills||73.06||73.06|
|Jain Irrigation Systems||49.95||49.95|
|Lemon Tree Hotels||33.76||33.76|
|Va Tech Wabag||12.43||12.43|
|AU Small Finance Bank||7.04||7.04|
|Amara Raja Batteries||5.93||5.93|
|Jindal Saw ||3.82||3.82|
|Tata Consultancy Services||2.94||2.94|
|The Ramco Cements||1.97||1.97|
|Team Lease Services||1.23||1.23|
|EID Parry (India)||0.05||0.05|
|Cholamandalam Financial Holdings||0.04||0.04|
|S H Kelkar & Company||0.04||0.04|
|Tube Investments of India||0.04||0.04|
Decline in promoter pledged holding
And there are 30 companies in which promoters have reduced their pledge holding as against the previous quarter. Some of the companies include DCM Shriram, Apollo Hospitals Enterprise, Reliance Power, Reliance Infrastructure and NOCIL.
|Apollo Hospitals Enterprise||36.66||67.33||-30.67|
|Adani Green Energy||14.7||16.97||-2.27|
|Zee Entertainment Enterprises||16.38||18.52||-2.14|
|Deepak Fertilizers & Petrochemicals Corp||75.71||77.5||-1.79|
|Sun Pharma Advanced Research Company||1.32||3.05||-1.73|
|Bombay Burmah Trading Corporation||0.71||2.27||-1.56|
|Tata Consumer Products||2.71||3.99||-1.28|
|Lakshmi Vilas Bank||34.91||35.02||-0.11|
|Tata Power Company||3.85||3.96||-0.11|
|Navin Fluorine International Limited||3.43||3.54||-0.11|
|Dish TV India||93.46||93.51||-0.05|
|Bombay Dyeing & Manufacturing Company||0||0.05||-0.05|
Source for all three tables – BSE
*Reliance Capital promoter holding declined to 1.51% in Mar-20 as against 33.51% in Dec-19.
Please note that the shareholding data of Rajesh Exports and Indian Hotels are yet not available. Both these companies had zero promoter pledge in the last two quarters.
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