Share pledging by promoters declined during the April-June quarter (first quarter, or Q1) of 2022-23 (FY23) as markets fell nearly 10 percent, a report by Business Standard stated.
According to brokerage Kotak Institutional Equities (KIE), promoter pledged holdings - as a percentage of promoter holding - dropped to 1.5 percent in Q1FY23, from 1.71 percent in the January-March quarter (fourth quarter, or Q4) of 2021-22 (FY22), noted BS.
Meanwhile, the value of promoter pledged holdings stood at ₹1.7 lakh crore, 0.77 percent of the market capitalisation (m-cap) of BSE 500 companies, it added. In the preceding quarter (Q4FY22), the value of pledged holdings was at ₹2.1 lakh crore, 0.86 percent of m-cap, noted the report.
BS also pointed out that promoter pledges were created in a total of 81 companies in Q1FY23.
Only three companies - Thyrocare Technologies, Max Financial Services, and Suzlon Energy - had more than 80 percent of their promoter holdings pledged, stated the report.
Meanwhile, MedPlus Health Services, Sterling and Wilson, Jindal Steel & Power, Sobha, and Strides Pharma Science were among companies that saw a substantial increase in promoter pledged holdings, BS highlighted.
However, Lemon Tree Hotels, Adani Power, and Sun Pharmaceutical Industries saw a decline in promoter pledged holdings while Cyient and ELGi Equipments saw fresh pledge creations during the quarter, the report noted.
Among the Nifty50 companies with more than 5 percent of pledged promoter holdings include Adani Ports and Special Economic Zone (13.1 percent of promoter holding pledged), Apollo Hospitals Enterprise (16.4 percent), Asian Paints (11 percent), IndusInd Bank (45.5 percent), and JSW Steel (15.8 percent), further informed the report.
The note by KIE clarified that pledging of shares does not necessarily imply that a company or a promoter is under financial stress, said BS.
