Promoter share pledge rises to 1.61% in October-December quarter

Share pledging by promoters rose during the October-December quarter (third quarter, or Q3) of 2022-23 (FY23) in the midst of a 6 per cent gain in the benchmark Nifty index.

According to a report by Kotak Institutional Equities (KIE), the value of promoter-pledged holdings - as a percentage of promoter holding - rose to 1.61 per cent in Q3FY23, from 1.57 per cent in the July-September quarter of FY23.

The value of total pledged holdings by promoters stood at Rs 2.2 trillion, or 0.83 per cent of the total market capitalisation of the BSE 500 Index.

“Promoters of major Indian companies raised their share pledges in the December quarter, as equity markets experienced volatility due to global policy tightening in response to rising inflation,” the report said.

Promoters in 87 companies in the BSE 500 Index had at least some portion of their holdings pledged at the end of Q3FY23. Of this, only 17 had more than 25 per cent of their promoter holdings pledged.

Companies whose promoters pledged to have more than 90 per cent of their holdings were Max Financial Services and Thyrocare Technologies.

Companies that saw substantial increase in promoter-pledged holdings included Lloyds Metals & Energy, Happiest Minds Technologies, Wockhardt, Emami, and Ajanta Pharma.

Alternatively, entities where pledged promoter holdings declined were Motherson Sumi Wiring India, Deepak Fertilisers and Petrochemicals Corporation, GMR Airports, Granules India, and 360 ONE.

Fresh promoter pledges were seen in Lloyds Metals & Energy and Happiest Minds Technologies, according to the KIE report.

Among the Nifty 50 components, the highest promoter pledges were seen in Adani Ports and Special Economic Zone (17.3 per cent), Apollo Hospitals Enterprise (16.4), Asian Paints (7.6), IndusInd Bank (45.5), and JSW Steel (17.6).

Forsooth, the KIE report is based on December 2022 data. There could have been changes since then to the promoter pledges.