Value of shares pledged by promoters of BSE-listed firms down 11%

The value of shares pledged by promoters of BSE-listed companies fell to Rs 2.14 lakh crore at the end of June quarter, a decline of almost 11 per cent from the preceding three months, according to exchange data.

The value of pledged shares stood at Rs 2.4 lakh crore as of March-end.

At the end of the April-June quarter, the first of current fiscal, pledging of shares by promoters was seen in as many as 3,018 out of 4,863 BSE-listed companies with a market capitalisation of over Rs 144 lakh crore.

As many as 64 firms, part of top 500 companies listed on the BSE, witnessed pledging of shares by promoters during the period.

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 of stress. High pledging levels are not considered a good sign by investors as a downturn in the market price can lead to invocation and change in management.

According to the BSE data, promoters of 421 firms pledged up to 30 per cent of their holdings worth Rs 1.25 lakh crore.

Besides, while 145 firms saw 30-50 per cent of the promoters' holding worth Rs 35,792 crore being pledged, 79 companies witnessed pledging of their stake in the range of 50-70 per cent, valued at Rs 23,321 crore.