Promoters pledge shares worth Rs 2.4 trn in March qtr, 21% dip registered

The value of shares pledged by promoters of BSE-listed firms stood at Rs 2.4 trillion at the end of March quarter, a decline of 21 per cent from the preceding three months, the bourse data showed.

The value of shares pledged by promoters stood at Rs 3.03 trillion at the end of December quarter.

Share pledging is typically done by promoters to raise funds either in the same company or for financing other projects.

High pledging levels are typically not considered a good sign by the investors as a downturn in the market price can lead to invocation and change in management.

Till March this year, pledging of shares was seen in as many as 3,074 of the 5,035 BSE-listed companies. The value of these shares pledged was Rs 2.39 trillion, the data noted.

At the end of last month, value of shares pledged with non-banking finance companies (NBFCs) was Rs 1.43 trillion.

Besides, there were 461 firms in which 5-30 per cent stake of the promoters was pledged, while in case of 140 companies, 30-50 per cent holding of the promoters was under pledge. As many as 81 companies had 50-75 per cent of promoters' holding under pledge.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel