6 takeaways from KIE's analysis of promoters' pledged holdings in March 2024 quarter

Value of the promoter (majority shareholder) pledged holding as a percentage of the promoter holding has come down marginally to 1.10 percent in the March 2024 quarter from 1.17 percent in the December 2023 quarter.

Max Financial Services, Eris Lifesciences and Ashok Leyland saw the highest sequential increase in percentage of promoters' pledged holding, according to a report by Kotak Institutional Equities.

It went up by 9.6 percentage points (pp), 7.6 pp and 7.1 pp, respectively, in the quarter ending March 2024 over the quarter ending December 2023.

Kalpataru Projects, Bharat Forge and GMR Airports saw the maximum sequential decline by 11 pp, 7.1 pp and 5.1 pp, respectively.

Also read: Moneycontrol's list of companies which have the maximum promoters' holding pledged

KIE's report, which analysed pledged holdings of BSE 500 stocks, came with a clarification that pledging of shares does not necessarily imply that a company or a promoter is under financial stress.

Here are five interesting takeaways from their analysis.

1. Value of the promoter (majority shareholder) pledged holding as a percentage of the promoter holding has come down marginally to 1.10 percent in the March 2024 quarter from 1.17 percent in the December 2023 quarter, showed their analysis.

2. None of the companies saw their promoters pledging more than 75 percent of their holdings in the March quarter, like the previous two quarters. A year ago, in March 2023 quarter, three companies had their promoters pledging more than 75 percent of their holdings.

3. There were no fresh promoter pledges in the March quarter and promoters of Bharat Forge, Lemon Tree Hotels, and Tata Communications released almost their entire pledged holdings in the quarter.

4. Companies in the Nifty-50 with more than 5 percent of pledged promoter holdings were Apollo Hospitals (16.1 percent), Asian Paints (7 percent), IndusInd Bank (45.5 percent) and JSW Steel (15.2 percent).

Also read: Adani Group releases Rs 26,500 crore pledged shares in FY24

5. Among the components of the BSE 500 index, Sterling & Wilson, Swan Energy and United Breweries saw the highest percentages of promoter pledged holding at 37.2 percent (value of Rs 2,400 crore), 18.4 percent (Rs 2,100 crore), and 12.4 percent (Rs 4,000 crore). The others' percentages were in the range of 0.1 percent and 5.4 percent.