BSE-listed companies’ pledged shares jump by 6%

The shares pledged by BSE-listed companies’ promoters soared by 6% to over Rs 2.64 lakh crore at the end of July as compared to Rs 2.5 lakh crore at the end of June. According to data released by the stock exchange, till July 2017 the pledging of shares was seen in as many as 3,072 of the 5,291 companies.
 
Share pledging is done by promoters in order to raise funds either in the same company or for financing other projects. High levels in pledging are not considered a good sign by investors as a downturn in the market price can lead to change in management. The value of shares pledged with non-banking finance companies (NBFCs) was Rs 62,835 crore at the end of July.
 
Apart from this, there were 146 companies in which 30-50% holding of the promoters was under-pledged and as many as 84 in which 50-75% was pledged. This is considered as a part of the BSE’s disclosure on the total number of listed companies, their market capitalisation, details about promoters’ pledge holding and their value every month within five working days of the subsequent month.