Did the market jump the gun in celebrating the reduction in pledged shares?
In many cases, pledged shares have been reduced because of compulsion, not due to improved company fundamentals
October 30, 2019 / 09:19 AM IST
Pledged shares as a mode of raising finance have acquired a bad name in the recent past, with lenders selling promoters shares in the open market on non-payment of dues. The market started punishing stocks where the promoters’ pledged share percentage was high, discounting the worst-case scenario.
However, now the exact opposite is happening. Reports say that promoters of nearly 50 listed companies have reduced the percentage of their pledged shares. Naturally, the market has taken notice of this...