Promoters' pledged shares value falls 13 pc in May

The value of shares pledged by the promoters of BSE-listed companies dropped nearly 13 per cent to Rs 2.25 lakh crore at the end of May, according to exchange data.

The worth of promoters' pledge holding stood at Rs 2.58 lakh crore as on April 30, 2018.

Share-pledging is typically done by promoters to raise funds either for the same company or for financing other projects.

Decline in the level of share-pledging may indicate scaling down in stress as high pledging levels are not considered a good sign by investors because a downturn in the market price can lead to invocation and change in management.

The value of shares pledged by the promoters of BSE-listed companies came down to Rs 2,25,170 crore at the end of May this year from Rs 2,57,744 crore as on April-end, indicating a drop of 12.64 per cent, according to the exchange data.

Till May 31, pledging of shares by promoters was seen in as many as 3,005 out of 4,851 BSE-listed companies with a market capitalisation of over Rs 147 lakh crore.

Promoters of 434 companies pledged up to 30 per cent of their respective holdings to the tune of Rs 1.37 lakh crore, while 135 firms saw 30-50 per cent of the promoter-holding worth Rs 39,537 crore being pledged in May.

Further, there were 82 companies in which 50-75 per cent of the promoter-holding worth Rs 25,225 crore was pledged.