Industry Odisha Bureau, Aug 9: The latest consolidated data reportedly claims that promoters in India have reportedly pledged holdings on BSE and NSE. Pledges worth approximately Rs 73,112.59 crore across 170 listed companies on the Bombay Stock Exchange (BSE) and Rs 9,36,815.37 crore across 1,539 companies on the National Stock Exchange of India (NSE) show stability.
As per media reports, “These figures are based on the number of shares encumbered (pledged) multiplied by the last available closing price of each stock, as disclosed in quarterly shareholding pattern filings under the Securities and Exchange Board of India (SEBI)’s Regulation 31 of the Listing Obligations and Disclosure Requirements (LODR).”
Reports on how the promoter pledging works have been explained as: “Promoters, who are the controlling shareholders who often founded the company, may use their equity holdings as collateral to secure loans from banks or Non-Banking Financial Company (NBFCs). Lenders typically advance a percentage (often up to 50–70%) of the market value of the pledged shares. If the share price falls, lenders can issue margin calls and sell pledged shares to recover dues. High pledging levels can signal financial stress or liquidity needs, though in some cases it is a routine financing move.”
Reports on why the pledging matters for the investors have been explained as: “Rising pledge percentage of promoter holding, especially without a corresponding increase in promoter stake, can be a red flag, while large-scale margin calls can trigger sharp share price declines.”
It has also reportedly been cautioned that, “Investors should monitor both the percentage of promoter shares pledged and the absolute value to assess potential risks.”
