5 Minutes Read
Bharat Forge, Lemon Tree bring pledged promoter shares down to zero
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
Listen to the Article (6 Minutes)
Summary
The value of pledged promoter holdings stood at ₹1.96 lakh crore at the end of the March quarter or 0.56% of the total market capitalisation of the BSE 500 index.
Bharat Forge Ltd., Lemon Tree Ltd. and Tata Communications Ltd. are among the companies that have managed to bring their pledged promoter holdings down to zero during the January-March quarter, according to a report from Kotak Institutional Equities.
During the December quarter, Bharat Forge had 7.1% of its promoter holding pledged, while Lemon Tree and Tata Communications had 3.3% and 3.1% respectively.
Among other companies that have seen a significant reduction in pledged promoter holdings included the likes of Kalpataru Projects and GMR Airports. While Kalpataru Projects saw a double-digit reduction, GMR Airports also brought its pledged promoter holding down below 60%.
| Stock | December Pledge (%) | March Pledge (%) |
| Kalpataru Projects | 42.5 | 31.5 |
| Bharat Forge | 7.1 | Nil |
| GMR Airports | 63.4 | 58.2 |
| Lemon Tree | 3.3 | Nil |
| Tata Communications | 3.1 | Nil |
According to Kotak Institutional Equities, the pledged holdings as a percentage of promoter holdings fell to 1.1% at the end of the March quarter, compared to 1.17% in December. Promoters of 73 companies listed on the BSE-500 pledged a part of their holdings during this period.
The value of pledged promoter holdings stood at ₹1.96 lakh crore at the end of the March quarter or 0.56% of the total market capitalisation of the BSE 500 index.
| Pledged Promoter Holding | |
| Quarter | As % Of Total Holding |
| March 31, 2022 | 1.71 |
| June 30, 2022 | 1.5 |
| September 30, 2022 | 1.57 |
| December 31, 2022 | 1.61 |
| March 31, 2023 | 1.3 |
| June 30, 2023 | 1.36 |
| September 30, 2023 | 1.22 |
| December 31, 2023 | 1.17 |
| March 31, 2024 | 1.1 |
On the flip side, companies like Max Financial Services saw the highest increase in promoter pledges during the quarter. Max Financial now has 69.2% of the total promoter holding pledged, although promoters now have only 6.5% shareholding in the company.
Stocks like Ashok Leyland and Jubilant Foodworks have also seen an increase in pledged promoter holdings by up to seven percentage points.
| Stock | December Pledge (%) | March Pledge (%) |
| Max Financial Services | 59.6 | 69.2 |
| Eris Life | 11 | 18.5 |
| Ashok Leyland | 15 | 22.1 |
| Jubilant Foodworks | 0.8 | 5 |
| Lloyds Metals | 20.9 | 24.2 |
Other companies which have also seen an increase in promoter pledge during the quarter include Aarti Industries, Aurobindo Pharma, PVR INOX, Solar Industries and Asian Paints, according to the Kotak note.
Asian Paints is also one among the four Nifty 50 constituents that have pledged promoter holding in excess of 5% at the end of the March quarter, with Apollo Hospitals, JSW Steel and IndusInd Bank being the other three.
| Nifty 50 Constituents | Promoter Holding (%) | March Pledge (%) |
| IndusInd Bank | 16.4 | 45.5 |
| Apollo Hospitals | 29.33 | 16.1 |
| JSW Steel | 44.81 | 15.2 |
| Asian Paints | 52.63 | 7 |
Kotak in its note has clarified that the pledging of shares may not necessarily imply that the company or a promoter is under financial stress. It could be that the lenders could have sought additional security in the form of promoter shares.
Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout
3 Mins Read
Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter
Daily Newsletter
