Corporate India’s pledged holdings reach Rs1,40,000 crore
08 May 2013
Promoters of listed companies in India have pledged shares worth about 1,40,000 crore as of end fiscal 2012-13 while the percentage of promoters having pledged shares of their companies stood at 20 per cent.
A major part of the pledged shares came from the industrial sector, followed by healthcare and consumer non-essential segments, financial services firm Edelweiss said in a report released today.
"At Q4 FY13-end, from the universe of 3,861 companies that have declared their shareholding, promoters of 788 companies (over 20 per cent) have pledged part of their holdings.
"Value of pledged holding stands at Rs1,40,000 crore during the quarter," said the report tiled Pledge: Risk 'O' Meter'.
The report finds active pledging in some of the capital-intensive industries where fund crunch is felt most.
Some of the major companies with substantial pledging of promoter shares include United Spirits (about 96.95 per cent), HDIL (96.11 per cent) and Unitech (75.72 per cent).
Promoters of United Spirits and HDIL has been keeping over 90 per cent of their holdings pledged with creditors for over the past three quarters now, according to the report.
The report finds a tendency to pledge shares even among market heavyweights like Asian Paints, a Nifty-50 company. Asian Paints had 15.48 per cent of its promoter holdings pledged with creditors as of 31 March 2013 - the highest among NSE heavyweights. This, however, is down from the earlier level of 17.67 per cent.
The other companies with significant promoter pledging included Essar Ports (99.74 per cent), Pipavav Defence (96.98 per cent), Wockhardt (87.06 per cent), Jaypee Infratech (67.3 per cent) and Fortis Healthcare (63.77 per cent). Suzlon Energy, Era Infra Engg, Unitech, India Cements, Future Retail, Lanco Infratech, Omaxe, Dish TV and JSW Steel too had substantial pledged shares as of 31 March 2013.
Promoters use their shareholdings to raise capital in the market as these offer enough liquidity for lenders to sell and recover the cost.
The Securities and Exchange Board of India (SEBI) has made it mandatory for promoters to disclose data regarding pledged shares for transparency sake.
