Promoter share pledges rise in Dec quarter

NEW DELHI: More promoters have pledged their shares in during the pandemic to provide additional security on their loans f rom banks in the absence or run down of other assets.

According a report by Kotak Institutional Equities , value of pledged promoter holdings increased marginally to 2.09% in December 2020 quarter compared to 2.03% in the September 2020 quarter.

Promoters of 84 companies in the BSE-500 Index had pledged all or part of their holdings in the December 2020 quarter. The value of promoter pledged holdings was Rs 1.8 lakh crore at end-December 2020, which is about 1.04% of the total BSE-500 Index's market capitalisation.

"We clarify that pledging of shares does not necessarily imply that a company or a promoter is under financial stress; banks (lenders) could have sought additional security in the form of promoter shares," the brokerage said.