Promoter share pledging rises in Q1

Pledging of shares does not necessarily imply that a firm or a promoter is under financial stress

Pledging of shares by promoters increased in the June quarter, even as the markets rallied 5%. The percentage of promoter-pledged holding in the BSE 500 companies rose to 9.3% in June 2017 from 9.1% in March. At the end of June 2017 quarter, promoters had pledged shares worth Rs 1.86 lakh crore, 1.6% of the market capitalisation of the BSE 500 companies, says Kotak Institutional Equities in a report. Among the BSE 500 companies, promoters of only 136 companies have pledged their holdings. Among these, seven have pledged more than 90% of their holding.
 
Explanation
 
Pledging of