Faster-than-expected recovery from the pandemic induced disruptions and the resultant improvement in balance sheets in the second half of FY21 have helped India Inc promoters to redeem their pledged shares, according to a brokerage analysis. The pledged holding of the BSE-500 index shows that the value of pledged promoter holdings as a percentage of promoter holding declined to 1.64 in the March quarter from 2.09 in the December 2020 quarter, according to a Kotak Institutional Equities analysis.
When looked at from a percentage of the overall promoter shareholding and the pledged holding, GMR Infrastructure (72.8), Omaxe (63.8) and Sterling & Wilson (53.7) were leading the chart. Companies with the highest promoter pledged holdings as of March 2021 include Suzlon Energy (88.5 per cent), Future Consumer (88.4) and Max Financial Services (88.4), GMR Infrastructure (72.8), and Omaxe (63.8).
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The other firms with high promoter pledged shares are Sterling & Wilson (53.7), Future Retail (52), Dish TV (51.2) Kalpataru Power Transmission (50.8), Crompton Greaves Consumer (47.3), HFCL (44.7) Spicejet (43.9) Jindal Steel & Power (41.7), Indusind Bank (36.4), Emami (32.9), Adani Power (29.1), Apollo Hospitals (27.9), JSW Energy (25.4), and United Breweries (18.2).
The value of these promoter pledged holdings was Rs 1.6 lakh crore as of the March quarter, which is about 0.81 per cent of the total BSE-500 index's market capitalisation, the brokerage said on Tuesday. Similarly, there was a widespread decline in pledged promoter holdings in almost all the Nifty-50 companies, except for IndusInd Bank where it increased.
However, it has to be kept in mind that pledging of shares does not necessarily imply that a company or a promoter is under financial stress; and that lenders could have sought additional security in the form of promoter shares. Significantly, there was not a single company where promoters pledged more than 90 per cent of their holdings. However, there was a substantial increase in pledged promoter holdings in IndusInd Bank, Aurobindo Pharma, Aster DM Healthcare, Wockhardt and Ashok Leyland, among others.
Major companies in which share pledge declined include Adani Ports & SEZ, Crompton Greaves Consumers, Adani Transmission, Time Technoplast and Laurus Labs, among others, while Aster DM Healthcare and IndusInd Bank saw fresh pledging, the report said, adding Dhanuka Agritech promoters had released the entire pledged holdings during the quarter. From the Nifty-50 index where promoters redeemed a portion of their pledged holdings include Adani Ports & SEZ, Asian Paints, JSW Steel, Sun Pharmaceuticals, Tata Consumer, Tata Motors, Tata Steel and TCS.
Nifty-50 stocks with over 5 per cent of pledged promoter holdings include Adani Ports & SEZ (16 per cent), Asian Paints (9.4), IndusInd Bank (36.4), JSW Steel (17.7) and Sun Pharma (8.6), among others.