Promoter-pledging declines further in June

Promoters of 3,018 companies listed on BSE's equity exchange pledged their holding and the value of pledged holding was at Rs. 2,14,075 crore, as of the end of June 2018 compared to Rs. 2,25,170 crore in the previous month. This shows a reduction in the value of pledged holdings, despite an increase in the number of companies pledging shares.

A listed company's promoter holding and the percentage of pledged shares indicates its financial health. Promoter's pledge shares to gain access to working capital or bring in a new investor. They also pledge shares as collateral to meet bank's conditions for debt. Increased promoter-pledging is seen as a sign of worry by shareholders and may cause volatility in the share price.

In June 2018, of the 4,863 companies listed on BSE, promoters of 3,018 companies pledged their shares as compared to 3,005 companies in May 2018. However, the value of promoter's pledged shares decreased marginally to Rs. 2,14,075 crore in June, as against Rs. 2,25,170 crore in May, according to the data released by BSE Limited.

If we compare the percentage of shares pledged in June, 421 companies' promoters pledged upto 30 per cent stakes, compared to 434 companies in May, and among these 48 companies belonged to the BSE 500 index. Another 145 companies' promoters pledged upto 50 per cent holding, compared to 135 companies last month, of these 12 companies belong to the BSE 500 index. In June, the highest percentage of pledging, 50 to 70 per cent, was witnessed in 79 companies of, which 4 belong to BSE 500 companies.