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 Engineering55.6630.3125.35
Max Financial Services94.7671.5423.22
Future Retail80.2957.7722.52
Adani Ports & Special Economic Zone58.2536.4121.84
Adani Enterprises49.7930.1119.68
Adani Transmission53.6335.2918.34
Emami89.2471.5817.66
IRB Infrastructure Developers17.580.2517.33
JSW Energy53.8537.1816.67
Kalpataru Power Transmission57.541.3816.12
Time Technoplast34.7621.0313.73
Laurus Labs45.2232.2712.95
Wockhardt37.1224.712.42
Parag Milk Foods48.135.6912.41
Centrum Capital49.3338.7610.57
Jindal Steel & Power74.865.589.22
Granules India37.6230.297.33
JSW Steel39.7932.527.27
Uflex16.679.557.12
D B Corp40.433.826.58
Godrej Industries6.0706.07
Max India81.9276.035.89
UPL7.962.325.64
GMR Infrastructure76.3772.34.07
Delta Corp11.267.323.94
Chambal Fertilisers & Chemicals25.1721.283.89
Motherson Sumi Systems13.059.243.81
Sun Pharmaceuticals Industries13.2210.073.15
Edelweiss Financial Services18.9115.982.93
Orient Cement16.0913.362.73
Strides Pharma Science50.9348.22.73
Adani Power32.4629.92.56
Jamna Auto Industries2.0502.05
Crompton Greaves Consumer Electrical65.5864.061.52
Mahindra & Mahindra3.041.681.36
Apollo Tyres16.2715.021.25
Aurobindo Pharma6.174.991.18
Sun TV Network4.693.531.16
Future Consumer92.9791.91.07
Orient Electric15.6114.750.86
Dilip Buildcon28.6427.790.85
Jubilant Foodworks3.612.890.72
Godrej Consumer Products0.6600.66
Shilpa Medicare10.269.770.49
Ajanta Pharma17.2916.860.43
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 Corporation100100
Future Lifestyle Fashions99.7899.78
Jindal Stainless (Hisar)87.787.7
Jindal Stainless82.4882.48
Suzlon Energy76.3476.34
Balrampur Chini Mills73.0673.06
Jain Irrigation Systems49.9549.95
Torrent Power48.5448.54
SpiceJet44.0144.01
Torrent Pharmaceuticals36.4936.49
Metropolis Healthcare33.8333.83
Lemon Tree Hotels33.7633.76
Chalet Hotels32.1232.12
IndusInd Bank26.3326.33
United Breweries18.218.2
Dhanuka Agritech1414
Shoppers Stop12.612.6
Va Tech Wabag12.4312.43
Ashok Leyland9.269.26
Jyothy Labs8.538.53
Infibeam Avenues7.537.53
AU Small Finance Bank7.047.04
Amara Raja Batteries5.935.93
Radico Khaitan4.554.55
Tata Motors3.953.95
Jindal Saw
3.82
3.82
Atul3.763.76
Tata Consultancy Services2.942.94
Manappuram Finance2.192.19
The Ramco Cements1.971.97
Team Lease Services1.231.23
GHCL1.11.1
EID Parry (India)0.050.05
Carborundum Universal0.040.04
Cholamandalam Financial Holdings0.040.04
S H Kelkar & Company0.040.04
Tube Investments of India0.040.04
Finolex Industries0.020.02
Coromandel International0.010.01
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 Shriram076.65-76.65
Apollo Hospitals Enterprise36.6667.33-30.67
Reliance Power53.7576.83-23.08
Reliance Infrastructure66.0985.69-19.6
Arvind Fashions04.07-4.07
NOCIL15.1717.67-2.5
Swan Energy15.0417.49-2.45
Adani Green Energy14.716.97-2.27
NCC34.1836.37-2.19
Zee Entertainment Enterprises16.3818.52-2.14
Gayatri Projects97.8999.99-2.1
Deepak Fertilizers & Petrochemicals Corp75.7177.5-1.79
Sun Pharma Advanced Research Company1.323.05-1.73
KPIT Technologies17.0918.69-1.6
Bombay Burmah Trading Corporation0.712.27-1.56
Tata Consumer Products2.713.99-1.28
HFCL67.8568.78-0.93
Asian Paints11.8712.53-0.66
Just Dial1.732.3-0.57
Tata Steel3.373.51-0.14
Gateway Distriparks19.8119.93-0.12
Lakshmi Vilas Bank34.9135.02-0.11
Tata Power Company3.853.96-0.11
Navin Fluorine International Limited3.433.54-0.11
Zydus Wellness27.2327.31-0.08
Dish TV India93.4693.51-0.05
Bombay Dyeing & Manufacturing Company00.05-0.05
India Cements27.1827.22-0.04
MRF00.03-0.03
Sobha20.3620.37-0.01
Varun Beverages0.120.13-0.01
Omaxe52.3252.33-0.01

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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