Pledge revoking gains momentum; 107 of BSE 500 companies reduce holdings

60% of BSE 500 companies have seen a drop in pledged shares


Rally in the equities and gradual improvement in the stressed sectors of the economy like power and infrastructure has led to a sharp decline in the shares pledged by companies. In the BSE 500 universe, 107 companies have reduced their pledged holding since April 2015 of which 46 have brought the pledged holding to zero, data compiled from Capitaline showed. Among these, 46 companies have brought their pledged holding to zero during the period.

The data takes into account only the 178 companies in BSE 500 which have reported some pledge activity since Q4FY15.

Reliance Defence, Unitech,Tata Global Beverages and GMR Infra are some of the big players who have cut down their pledged holdings during the period. On the other hand, India Cements, Tata Communications, Amar Raja Batteries and Century Plywood are among the companies that have brought down their pledged holding to zero since April, 2015, data showed.

Stock movement is one of the key factors for increasing or decreasing the shares pledged by a company. For instance, a company has pledged ten shares worth Rs 10 each for a total value of Rs 100. If the shares rally to say Rs 20 apiece, the total pledged value would become Rs 200 and at this point pledge on five shares worth Rs 100 can be revoked.

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