How much of BSE 500 is promoter pledged?

Pledging of equity shares is one of the ways which promoters use for availing loans.

Though there’s nothing wrong with this practice yet high promoter pledge per cent can cause serious selling pressures on the company stock, if the promoter is unable to repay the loan and thus, the lenders have to thereby resort to selling the pledged shares in order to receive the dues.

Hence, we analysed how much of BSE 500 universe is pledged, or has the promoter pledging increased or decreased as a trend? Here are the results of our analysis:

The total market cap of BSE 500 is around Rs 1,50,81,223 crore. Out of this, nearly 50 per cent is owned by the promoter entities of the companies. Of the total Rs 76,44,712 crore owned by the promoters, they have in aggregate, a pledge on just Rs 1,77,468 crore. This is about 2.32 per cent of the total promoter holdings. On a totality basis, this pledged subset is approximately 1.18 per cent of the total market cap of BSE 500 stocks. Out of the total stocks in BSE 500, only 9 companies saw an increase in promoter pledging per cent in June quarter as compared to March quarter. Compared to that, 55 companies actually saw a reduction in promoter pledging per cent QoQ.

Thus, we can safely say that promoters by and large have not resorted to pledging their shares for funds in this slowdown.