Pledged shares: Promoters staring down the barrel of a gun

Santosh Nair
Moneycontrol.com

If the downturn in the stock market continues for some more time, promoters of quite a few mid-cap companies risk losing control of their empires. According to a report by rating agency CRISIL, promoters of nearly a third of the 1200-plus listed companies have pledged their shares with finance companies to raise money. Of these, promoters of around 45 companies have pledged between 80-100% of their holdings. As a way of raising money, promoters pledge shares for a number of reasons, including expansion. While, according to SEBI guidelines, they have to make known the amount of shares pledged, they don