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Pledging of shares at seven-year high: study

Priya Nair 

What does it mean if the shares of a company are pledged by the promoter? Pranav Haldea, managing director of Prime Database, says pledging of shares by promoters is by itself not a bad thing, as it is the fastest and cheapest way to raise funds.

But, a combination of high levels of promoters pledging shares, high debt and bad financials can be risky. "While there is no scientific number to the percentage of promoters' shareholding under pledge, if it is more than 50-60 per cent, I would stay away from such companies. Additionally, if there is a market correction and share prices ...

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First Published: Sun, August 28 2016. 22:25 IST
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