Chasing promoters’ activities sometimes can help you to understand the prospects of the company. Pledging of shares is one of them. For the latest quarter ended March 31, 2022, promoters pledged shares worth Rs 2.1 lakh crore, which is about 0.86 per cent of the total market capitalisation of the BSE 500 stocks.
An analysis by Kotak Institutional Equities showed that the value of promoter pledged holdings as a percentage of promoters holding increased to 1.7 per cent in the March 2022 quarter in the BSE 500 index from 1.6 per cent in the previous quarter.
Data highlighted promoters of 82 companies in the BSE 500 index had pledged part of their holdings in the March 2022 quarter. Only two companies, Suzlon Energy and Max Financial Services, had more than 80 per cent of their promoter holdings pledged.
“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,” Kotak Institutional Equities said in a report.
Sundaram Clayton, Max Financial Services, Strides Pharma Science, Spandana Sphoorty and PVR stood among the companies where promoters raised pledged holdings. On the other hand, Sterling & Wilson, Aurobindo Pharma, Sobha, Lemon Tree Hotel and Apollo Hospitals stood among the companies in which pledged promoter holdings declined during the quarter.
During the quarter, fresh share pledges were seen in companies like Sundaram Clayton, Spandana Sphoorty, PVR and Uflex.
According to Kotak Institutional Equities Research, companies in the Nifty50 with more than 5 per cent of pledged promoter holdings included Adani Ports & SEZ (13.4 per cent), Apollo Hospitals (16.4 per cent), Asian Paints (11.1 per cent), IndusInd Bank (45.5 per cent), JSW Steel (15.8 per cent) and Sun Pharmaceuticals (5.6 per cent).
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