Pledging of shares by promoters at 3-yr-high in Aug

The last time it was higher was on April 30, 2017 at 1.88 per cent, as per prime info base, an initiative of Prime Database.

In value terms, promoters’ share pledging increased by a huge 55.97 per cent from last month with the value of pledged shares going up to Rs 2.77 lakh crore as on August 31, compared to Rs 1.78 lakh cr as on July 31, as per Pranav Haldea, MD, Prime Database Group. “This increase was driven by pledging of shares by promoters in Hindustan Zinc and Vedanta for the purpose delisting,” he noted.

As on August 31, 2020, shares were pledged in 463 of the 1,656 main-board firms listed on NSE, as compared to 461 companies on July 31. High pledge levels are typically not considered a good sign by the investors as a downturn in the market price can lead to invocation and change in management. Surprisingly, there were 29 firms in which the complete holding (100 pc) of the promoters was under pledge.