Pledged holdings for the BSE500 stocks decline in June 2018 quarter

Pledged holdings for the BSE500 stocks declined in the June 2018 quarter as against the preceding quarter. The percentage of pledged promoter holdings reduced to 6.8 per cent, from 7.4 per cent in the March quarter, according to Kotak Institutional Equities. The value of pledged holdings stood at Rs1.82 trillion, 1.37 per cent of market capitalisation of the BSE500 stocks. The brokerage attributed the fall in pledged holdings to changes in the constituents of the BSE-500 index.

A total of 119 from the BSE 500 index — down from 128 in the previous quarter — had at least some of their holdings pledged at the end of the June quarter.

Typically, promoters pledge shares to raise capital to meet their funding requirements. In case of decline in the stock prices, the lenders ask for additional security in the form of shares.

Among the BSE500 stocks, Indiabulls Real Estate, Granules India, Laurus Labs, Adani Transmission and Kwality saw highest increase in pledged promoter holdings. On the other hand, KPIT Technologies, Advance Enzyme, Apollo Tyres, Century Textiles and Bombay Burmah saw the highest decline.

In the Nifty 50 universe, companies with more than 10 per cent pledged promoter holdings include Adani Ports (38.3 per cent), Asian Paints (12.5 per cent), Indiabulls Housing Finance (17.9 per cent) and Zee Entertainment (52.1 per cent).