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This article has been modified. Please see the clarification at the end.
The stress on promoters is showing no signs of abating, as the percentage of pledged shares continued to rise in the December quarter.
Analysis by the BS Research Bureau shows promoters of 13 companies pledged more than 90 per cent of their holdings in the December quarter (see list).
Analysts believe this might not be a sign of concern but that banks might have sought additional security in the form of higher pledges from promoters.
In the December quarter, the value of pledged shares (BSE 500) increased to Rs 1.64 lakh crore from Rs 1.54 lakh crore in the September quarter. In percentage terms, pledged holding increased to 13.62 per cent in December from 12.6 per cent in September. Of BSE 500 companies, promoters of 142 companies have pledged their holding.
IVRCL pledged 100 per cent of promoter holdings, while others like Alok Industries have pledged 99.77 per cent of promoter holdings, and 99.72 per cent of promoter holding in Essar Ports has been pledged.
According to Kotak Institutional Equities, the highest increase in promoters’ pledged holdings was seen in IVRCL, Edelweiss Financial Services, Reliance Infrastructure, IL&FS Transportation, Sadbhav Engineering and Rasoya Proteins. Promoters who decreased their pledged holdings included Orchid Chemicals, Ballarpur Industries, Gati, Strides Arcolab, Lakshmi Vilas Bank, Radico Khaitan and Jyothy Laboratories.
Promoters of Stride Arcolab completely revoked their pledged holdings during the quarter.
CLARIFICATION
An earlier version of this article had wrongly mentioned that 100 per cent of the promoters' shares in Tree House Education had been pledged. Promoters of Tree House Education have pledged only 27.82 per cent of their total shareholding in the company as at the end of December 2014. After the exclusion of Tree House, the number of companies where promoters have pledged over 90% of their shares stands reduced from 14 to 13. The error is regretted.
