Pledged holdings for BSE 500 stocks decline in the March 2018 quarter

Pledged holdings for BSE 500 stocks declined in the March 2018 quarter compared to the preceding quarter. The percentage of pledged promoter holdings reduced to 7.4 per cent from 7.8 per cent in December 2017, according to Kotak Institutional Equities. The value of pledged holding stood at Rs 1.8 trillion, 1.43 per cent of the market capitalisation of BSE 500 stocks. A total of 128 companies of the 500 companies had at least some of their holdings pledged at the end of March quarter. 

Source: Prime Database, BSE, NSE, Kotak Institutional Equities; *As % of total holding

Typically, promoters pledge shares to raise capital to meet their funding requirements. In case of a decline in the stock prices, the lenders ask for additional security in the form of shares. Among the BSE 500 stocks, Centrum Capital, Emami, Granules India and Adani Ports saw the highest increase in pledged promoter holding. On the other hand, Fortis Healthcare, Shree Renuka Sugars and Jubilant Life Sciences saw the highest decline. In the Nifty 50 universe, only six companies have more than five per cent of promoter holdings pledged. These include Asian Paints (13.2 per cent), Tata Motors (5.3 per cent) and Zee Entertainment (52.6 per cent).