GMR Airports to Emami: Companies Having the Biggest Pledged Promoter Stakes

At the end of the September quarter, 1.22% of promoter holdings were pledged, compared to 1.36% in the June quarter.

According to Kotak Securities, the level of promoter pledged shares of BSE 500 firms fell to 1.22% in the September 2023 quarter from 1.36% in the June 2023 quarter, indicating that tension among corporate promoters is reducing. 

“The value of the promoter (majority shareholder) pledged holding as a percentage of the promoter holding declined to 1.22% in the September 2023 quarter from 1.36% in the June 2023 quarter,” according to the report.

Promoters of 82 BSE-500 Index businesses have promised a portion of their ownership in the September 2023 quarter. 

The value of pledged promoter holdings was Rs 1.8 trillion (about 0.61% of the whole market capitalization of the BSE-500 Index).

It should be noted that pledging shares does not always signal that a firm or a promoter is in financial trouble; banks (lenders) may have requested extra security in the form of promoter shares.

Highlights of pledged holding declarations for the September 2023 quarter

• Companies in which the promoters committed more than 75% of their holdings: None.

• Significant growth in pledged promoter interests, including TTK Prestige, IndusInd Bank, and The Ramco Cements.

• Companies with declining committed promoter interests include Suzlon Energy, Max Financial Services, Jindal Steel & Power, Sobha, and Emami.

• TTK Prestige has made a new promoter commitment.

• Suzlon Energy, Sobha, and Dixon Technologies are three companies whose promoters have relinquished their whole pledged ownership.

• Nifty-50 companies with more than 5% committed promoter shares include Apollo Hospitals (16.1%), Asian Paints (6.5%), IndusInd Bank (47.3%), and JSW Steel (14.1%).

• The study examines changes in pledged holdings between the quarters of June 2023 and September 2023. 

Promoters of India’s top 500 businesses, which account for 96% of total listed company market value, reduced their share commitments by at least 88,345 crore (roughly $11 billion) during the March quarter. According to Mint analysis based on the most recent regulatory filings, this is the largest pledge decrease by Indian corporations in any one quarter.

According to the most recent disclosures, the value of promoter pledges in these Nifty 500 businesses has fallen by roughly 21% from 4.39 trillion at the end of December to 3.5 trillion on March 31. This suggests that the decrease in pledge value is mostly attributable to the enormous release of shares promised by promoters.

According to the records, numerous leading corporations, except those in the Adani group, showed a large decrease in promoter share commitments during the March quarter. JSW Steel’s promoters lowered their commitment from 17.57% to 16.35%, Ajanta Pharma’s pledge from 19.87% to 11.41%, Triveni Engineering’s pledge from 15.06% to zero, Max Financial’s pledge from 92.96% to 85.05%, Asian Paints’ pledge from 7.62% to 7.41%, and United Breweries’ pledge from 14.97% to 14.45%.