Value of pledge holding companies eroded by around 30 per cent

Selloff in March'20 quarter eroded the value of pledge holding companies by around 30 per cent, further stressing the companies with sizable pledging.

Story: Shivani Sharma
Design: Pragati Srivastava

Value of shares pledged in BSE200 universe stood around $22 billion in the March quarter which was 13.4 per cent of promoter equity, up nearly 130 basis points quarter-on-quarter.

Compared to broader market, value of shares pledged stood at 1.3 per cent of BSE200 market cap and 7.6 per cent of companies that have pledged their shares.

Of the 42 companies that have pledged their shares in BSE200, nearly 60 per cent companies saw an increase in their pledging.

Moreover, of the 42 companies that have pledged their shares, around 25 per cent companies saw a decline in their pledging during the March quarter.

During the quarter, Torrent Pharma and MRF revoked their entire pledged shares, while Godrej Consumer and Godrej Industries created fresh pledges of 1 per cent and 6 per cent respectively. Max Financial saw maximum increase with pledged shares at $493 million (currently ~95 per cent vs ~72 per cent last quarter).

Apollo Hospital saw the sharpest decline with approximate pledged shares at 37 per cent compared to around 67 per cent in the previous quarter. This was followed by Adani Green which saw a decline in pledged shares from 17 per cent to 15 per cent in the past two quarters.

The sector-wise quarter-on-quarter change in pledged share value as per cent of promoter equity showed that the maximum change was in the infrastructure space, followed by 6 per cent Q-o-Q change in metals and 6 per cent Q-o-Q change in power sector. The Retail and BFSI sector saw a change of 3 per cent.