Promoters pledge shares worth more than Rs 2 lakh crore

Mumbai: The pledging of shares by promoters is steadily growing, with the value of promoters' pledged holding crossing Rs 2 lakh crore by this month.

According to BSE data, the number of companies where promoters have their holding pledged has risen to 2,951 and total value of it stands at 2.17 lakh crore as on February 21.

N analysis of pledged holdings of BSE-500 stocks shows that the percentage of pledged promoter holdings was steady in the December 2018 quarter compared to the September quarter. The percentage of pledged promoter holdings was at 6.7 per cent in the December quarter similar to that of September 2018. As of December 2018, the value of outstanding pledged shares were at Rs 1.96 lakh crore.

Companies in the Nifty-50 Index with more than 5 per cent of pledged promoter holdings are: Zee Entertainment (59.4 per cent), Adani Ports & SEZ (45.5 per cent), JSW Steel (43.6 per cent), IndusInd Bank (26.4 per cent) and Indiabulls Housing Finance (12.7 per cent).

Promoters of 116 companies pledged their holdings among BSE-500 Index stocks compared to 114 companies in the September 2018 quarter.

Six companies had more than 90 per cent of their promoter holdings pledged.

Companies whose promoters pledged more than 95 per cent of their holdings were: CG Power and Industrial, Kwality, Reliance Naval and Engineering, IL&FS Transportation Networks and Sterlite Technologies.

The highest increase in pledged promoter holdings was noticed inIndiabulls Real Estate, Coffee Day Enterprises, Jain Irrigation Systems, Infibeam Avenues and Jindal Steel & Power.

Companies in which pledged promoter holdings declined were: Fortis Healthcare, Suzlon Energy, Advanced Enzyme Technologies, Adani Transmission and Indiabulls Housing Finance.

Fresh promoter pledges were seen in Texmaco Rail, Uflex and Wockhardt.

Sonata Software saw promoters revoking their entire pledged holdings.

Recently promoter pledged shareholding have come into sharp focus as the value of the shares have dropped sharply, leading to offloading of shares by financiers in companies of Zee group and Anil Ambani-led Reliance Group.

Many promoters have been using their shareholding in companies to mop up funds to finance new projects or wade through the liquidity crunch, as bank financing has become tight.

Zee group stocks like Zee Entertainment, Dish TV, Zee Media, Zee Learn where a large chuck of promoter holdings are pledged with lenders saw massive selling, following which the promoters made an agreement with financiers not to offload stocks in the market.

In the case Reliance, the spat with lenders turned ugly as the Reliance Group has accused L&T Finance and Edelweiss Group entities of "illegal" and "motivated" actions in invoking the pledged shares of Anil Ambani group firms and selling them in the open market, causing a steep fall in share values.

Early this month, Reliance Power, Reliance Infrastructure and Reliance Capital plunged following offloading of pledged shares by the two lenders.

These companies had written to Sebi to investigate the matter and impose restraint on entities that pressed huge sale orders significantly below the prevailing market price alongside an in-depth investigate the matter.

The market regulator is now looking into the allegations made by the group.