The Stock Holding Corporation of India (SHCIL) has lent shares worth around Rs 60 crore in the last three months even as the stock markets have seen a sharp fall during this period.
The Bombay Stock Exchange (BSE) Sensex has dropped 611.43 points or 17.93 per cent since July 2, the day rolling settlement was kicked off. Stock lending was one of the causes for bear-hammering during March-April this year.
In fact, stock lending, by all approved intermediaries, was banned by the Securities and Exchange Board of India (Sebi) in mid-March following allegations of some brokers misusing the facility for pulling down stock prices.
SHCIL kicked off its securities lending business again on July 2 following the Sebi's permission to resume stock lending when rolling settlements began. Analysts feel that stock lending could be a tool for short sellers if exploited beyond proportion.
SHCIL managing director BV Goud said the corporation has resumed stock lending on behalf of its non-institutional clients. SHCIL's institutional clients such as Unit Trust of India, Life Insurance Corporation of India, General Insurance Corporation have not yet resumed the lending operations.
As per data available, SHCIL has lent aggregate securities worth Rs 59.29 crore in the last three months till September 27. Of this amount, software stocks -- which were hammered in the recent market crash-- were the highest at Rs 36.60 crore. This is followed by diversified stocks at Rs 7.72 crore and pharmaceutical stocks at Rs 5.56 crore.
As far as the high value loans are concerned, SCHIL has done 38 deals amounting Rs 13.40 crore in the range of Rs 25-50 lakh in the last three months. It has committed 16 deals amounting Rs 10.81 crore in the Rs 50 lakh to Rs 1 crore band. In the Rs 1 crore category, the corporation has done one deal worth Rs 1.25 crore.
