Published on 11/05/2018 3:19:28 PM | Source: Kotak Securities Ltd

India Strategy : Pledged holding analysis - Kotak Sec

Posted in Special Event Reports| #Kotak Securities Ltd #Special Report

Pledged holding analysis, March 2018 quarter.

Our analysis of pledged holdings of BSE-500 stocks shows that the percentage of pledged promoter (majority shareholder) holdings declined in the March 2018 quarter in comparison to the December quarter. The percentage of pledged promoter holdings reduced to 7.4%% in the March quarter from 7.8% in December. Promoters pledged shares worth `1.8 tn, which is about 1.43% of the total BSE-500 Index’s market capitalization in March 2018. Promoters of 128 companies pledged their holdings among BSE-500 Index stocks. Six companies had more than 90% of their promoter holdings pledged. We clarify that pledging of shares does not necessarily imply that a company or a promoter is under financial stress; banks (lenders) could have sought additional security in the form of promoter shares.

Highlights of March 2018 pledged holding disclosures

* Companies whose promoters pledged more than 95% of their holdings: Bajaj Hindustan, CG Power and Industrial, Reliance Naval and Engineering, JBF Industries, Suzlon Energy and IL&FS Transportation Networks.

* Highest increase in pledged promoter holdings: Kwality, Centrum Capital, Emami, Granules India and Adani Ports & SEZ.

* Companies in which pledged promoter holdings declined: Fortis Healthcare, Shree Renuka Sugars, Jubilant Life Sciences, Swan Energy and Jubilant Foodworks.

* Fresh promoter pledges: UPL.

* Promoters who revoked their entire pledged holdings: SRF and S H Kelkar.

* Companies in the Nifty-50 with more than 5% of pledged promoter holdings: Adani Ports & SEZ (34.3%), Asian Paints (13.2%), Indiabulls Housing Finance (12.5%), M&M (5.8%), Tata Motors (5.3%) and Zee Entertainment (52.6%).

* The report compares changes in pledged holdings between December 2017 and March 2018 quarters. Changes in pledged holdings post March 2018 have not been incorporated in this report.

* We have prepared this report based on the latest BSE-500 constituents.

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