Promoters pledge more stake in June quarter to meet margin calls

Illustration: Ajay Mohanty
Thirty-eight of the BSE500 companies in the June quarter pledged additional shares as collateral because their share prices fell and margin calls were triggered, statistics collated by Business Standard show.

 

The promoters of leading companies such as YES Bank, Reliance Capital, Adani Enterprises, Williamson Magor, and Eveready pledged additional shares to lenders seeking extra collateral.

 

“If the stock markets fall further, promoters will have to pledge additional stakes because the lenders would ask for more collateral. The experience of lenders on this count has not been good,” said a banker.

 

Eveready Industries pledged an additional 15.4 per cent shares because the company had a huge debt.

 

Eveready, part of Kolkata’s BM Khaitan group, is seeking to pare its debt. Early this month YES Bank acquired 9.4 per cent in Eveready after the bank invoked the pledged shares of the promoter.

The promoter holding in Eveready is 42.17 per cent, according to the March quarter filing. The Eveready stock has lost close to 75 per cent of its value in the past one year, pressuring the promoters to pledge additional shares. Lemon Tree Hotel and Jindal Steel pledged an additional 10.6 per cent and 7.5 per cent, according to statistics collated by this paper (see chart).

 

The promoter of Dish TV increased its pledged stake by 5.1 per cent to take the total to 60 per cent.

 

The company’s promoters are in talks to sell the company.

 

Analysts say there will be more share pledges this quarter as lenders turn aggressive in cushioning their exposure.

 

On July 23, YES Bank founder-promoter Rana Kapoor and his holding company Morgan Credits Pvt Ltd pledged 170 million shares, or 7.34 per cent, worth Rs 1,500 crore with Reliance Nippon Life Asset Management.

 

This was after YES Bank shares fell around 80 per cent in the last one year.

 

Anil Ambani-owned Reliance Capital pledged 22 per cent in Reliance Nippon Life Asset Management. Adani Enterprises promoter Gautam Adani on Wednesday pledged an additional 13.5 million shares, or 1.23 per cent, of AEL’s equity with IndusInd Bank, according to stock market filings.

 

Bankers said in many cases the promoters’ stake had come down after banks decided to convert their debt into equity.

 

The BSE data shows the promoters of telecom tower firm GTL Infrastructure now hold 3.41 per cent in the company as banks converted debt into equity.

 



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