Companies with high promoter share pledging punished by the bourses

Analysts say investors have turned wary of firms with high promoter pledging, given rising corporate debt

Firms that saw a steep increase in promoter share pledging, or invocation of share pledges by lenders, were hammered at the bourses. For instance, Eveready saw pledged promoter holding increase from 49.8 per cent at the end of March, to 88.5 per cent at the end of June (Q1). 

Its share price plunged nearly 60 per cent in Q1. Similarly, Lemon Tree Hotel, Jindal Steel & Power, and Orient Cement saw their stock facing the heat. On the other hand, the Street rewarded those in which promoters took steps to reduce outstanding pledged shares. On an overall basis, promoter pledging declined