Promoter Pledge Holding Update – Must Read

Promoter Pledge Holding Update – Must Read

2 MIN READ

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.

CompanyMar-2020Dec-2019Difference
Sadbhav Engineering 55.6630.3125.35
Max Financial Services 94.7671.5423.22
Future Retail 80.2957.7722.52
Adani Ports & Special Economic Zone 58.2536.4121.84
Adani Enterprises 49.7930.1119.68
Adani Transmission 53.6335.2918.34
Emami 89.2471.5817.66
IRB Infrastructure Developers 17.580.2517.33
JSW Energy 53.8537.1816.67
Kalpataru Power Transmission 57.541.3816.12
Time Technoplast 34.7621.0313.73
Laurus Labs 45.2232.2712.95
Wockhardt 37.1224.712.42
Parag Milk Foods 48.135.6912.41
Centrum Capital 49.3338.7610.57
Jindal Steel & Power 74.865.589.22
Granules India 37.6230.297.33
JSW Steel 39.7932.527.27
Uflex 16.679.557.12
D B Corp 40.433.826.58
Godrej Industries 6.0706.07
Max India 81.9276.035.89
UPL 7.962.325.64
GMR Infrastructure 76.3772.34.07
Delta Corp 11.267.323.94
Chambal Fertilisers & Chemicals 25.1721.283.89
Motherson Sumi Systems 13.059.243.81
Sun Pharmaceuticals Industries 13.2210.073.15
Edelweiss Financial Services 18.9115.982.93
Orient Cement 16.0913.362.73
Strides Pharma Science 50.9348.22.73
Adani Power 32.4629.92.56
Jamna Auto Industries 2.0502.05
Crompton Greaves Consumer Electrical 65.5864.061.52
Mahindra & Mahindra 3.041.681.36
Apollo Tyres 16.2715.021.25
Aurobindo Pharma 6.174.991.18
Sun TV Network 4.693.531.16
Future Consumer 92.9791.91.07
Orient Electric 15.6114.750.86
Dilip Buildcon 28.6427.790.85
Jubilant Foodworks 3.612.890.72
Godrej Consumer Products 0.6600.66
Shilpa Medicare 10.269.770.49
Ajanta Pharma 17.2916.860.43
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.

CompanyMar-20Dec-19
Dewan Housing Finance Corporation 100100
Future Lifestyle Fashions 99.7899.78
Jindal Stainless (Hisar) 87.787.7
Jindal Stainless 82.4882.48
Suzlon Energy 76.3476.34
Balrampur Chini Mills 73.0673.06
Jain Irrigation Systems 49.9549.95
Torrent Power 48.5448.54
SpiceJet 44.0144.01
Torrent Pharmaceuticals 36.4936.49
Metropolis Healthcare 33.8333.83
Lemon Tree Hotels 33.7633.76
Chalet Hotels 32.1232.12
IndusInd Bank 26.3326.33
United Breweries 18.218.2
Dhanuka Agritech 1414
Shoppers Stop 12.612.6
Va Tech Wabag 12.4312.43
Ashok Leyland 9.269.26
Jyothy Labs 8.538.53
Infibeam Avenues 7.537.53
AU Small Finance Bank 7.047.04
Amara Raja Batteries 5.935.93
Radico Khaitan 4.554.55
Tata Motors 3.953.95
Jindal Saw
3.82
3.82
Atul 3.763.76
Tata Consultancy Services 2.942.94
Manappuram Finance 2.192.19
The Ramco Cements 1.971.97
Team Lease Services 1.231.23
GHCL 1.11.1
EID Parry (India) 0.050.05
Carborundum Universal 0.040.04
Cholamandalam Financial Holdings 0.040.04
S H Kelkar & Company 0.040.04
Tube Investments of India 0.040.04
Finolex Industries 0.020.02
Coromandel International 0.010.01
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.

CompanyMar-20Dec-19Diffference
Reliance Capital*3.42
80.91
-77.49
DCM Shriram 076.65-76.65
Apollo Hospitals Enterprise 36.6667.33-30.67
Reliance Power 53.7576.83-23.08
Reliance Infrastructure 66.0985.69-19.6
Arvind Fashions04.07-4.07
NOCIL 15.1717.67-2.5
Swan Energy 15.0417.49-2.45
Adani Green Energy 14.716.97-2.27
NCC 34.1836.37-2.19
Zee Entertainment Enterprises 16.3818.52-2.14
Gayatri Projects 97.8999.99-2.1
Deepak Fertilizers & Petrochemicals Corp 75.7177.5-1.79
Sun Pharma Advanced Research Company 1.323.05-1.73
KPIT Technologies 17.0918.69-1.6
Bombay Burmah Trading Corporation 0.712.27-1.56
Tata Consumer Products 2.713.99-1.28
HFCL 67.8568.78-0.93
Asian Paints 11.8712.53-0.66
Just Dial 1.732.3-0.57
Tata Steel 3.373.51-0.14
Gateway Distriparks 19.8119.93-0.12
Lakshmi Vilas Bank 34.9135.02-0.11
Tata Power Company 3.853.96-0.11
Navin Fluorine International Limited3.433.54-0.11
Zydus Wellness 27.2327.31-0.08
Dish TV India 93.4693.51-0.05
Bombay Dyeing & Manufacturing Company 00.05-0.05
India Cements 27.1827.22-0.04
MRF 00.03-0.03
Sobha 20.3620.37-0.01
Varun Beverages 0.120.13-0.01
Omaxe 52.3252.33-0.01

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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