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Time of India
2 days ago
- Business
- Time of India
Why are more promoters pledging their shares in Nifty 500 companies?
In the March quarter, shares of several companies, which saw a rise in promoter pledges, had fallen 30-50%. During January-March, promoter stake pledges increased for 27 Nifty 500 companies, including Aadhar Housing Finance and Max Financial Services. While pledging isn't inherently alarming, it raises concerns when a company's fundamentals are weak, potentially amplifying negative impacts if business performance is already questionable. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Mumbai: Promoters' stake pledges went up for 27 companies out of the Nifty 500 companies during January-March, compared with 25 companies in the previous quarter, according to data from Primedatabase. Aadhar Housing Finance Max Financial Services and Raymond Lifestyles were among the companies that saw promoters pledging their holdings during the or shareholders, put up their shares as collateral for loans . While promoters placing their shares as collateral is not uncommon, sudden increases in such pledging catch the attention of the investor community."Pledging of shares in itself is not necessarily a concern and may be a means of leveraging the stake when markets are performing well," said Abhilash Pagaria, head of Alternative and Quantitative Research, Nuvama. "However, if a company's fundamentals are not sound, then it can be a sign of caution.""If a company's business fundamentals are already under the scanner and there is pledging of shares, then it can amplify the negative impact and result in the shares declining," he fall in stock prices could also lead to an increase in share pledges by promoters as lenders seek fresh shares to make up for the drop in value of the collateral. In the March quarter, shares of several companies, which saw a rise in promoter pledges, had fallen 30-50%."When promoter pledges increase, it can indicate the genuine need for capital and tend to move up due to a decline in markets as witnessed in the March quarter," said Manish Bhandari, CEO, Vallum are wary of companies with consistently high pledging of stakes by promoters, as in the past, there have been some instances of these founders defaulting on the loan, forcing the lenders to sell the pledged shares in the open market to make up for the non-payment. "A higher amount of shares can be pledged if the share price falls, as part of margin call; however, this is not a concern unless the increase is substantial of around 30-40%," said Bhandari.
Economic Times
2 days ago
- Business
- Economic Times
Why are more promoters pledging their shares in Nifty 500 companies?
Agencies Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Mumbai: Promoters' stake pledges went up for 27 companies out of the Nifty 500 companies during January-March, compared with 25 companies in the previous quarter, according to data from Primedatabase. Aadhar Housing Finance Max Financial Services and Raymond Lifestyles were among the companies that saw promoters pledging their holdings during the or shareholders, put up their shares as collateral for loans . While promoters placing their shares as collateral is not uncommon, sudden increases in such pledging catch the attention of the investor community."Pledging of shares in itself is not necessarily a concern and may be a means of leveraging the stake when markets are performing well," said Abhilash Pagaria, head of Alternative and Quantitative Research, Nuvama. "However, if a company's fundamentals are not sound, then it can be a sign of caution.""If a company's business fundamentals are already under the scanner and there is pledging of shares, then it can amplify the negative impact and result in the shares declining," he fall in stock prices could also lead to an increase in share pledges by promoters as lenders seek fresh shares to make up for the drop in value of the collateral. In the March quarter, shares of several companies, which saw a rise in promoter pledges, had fallen 30-50%."When promoter pledges increase, it can indicate the genuine need for capital and tend to move up due to a decline in markets as witnessed in the March quarter," said Manish Bhandari, CEO, Vallum are wary of companies with consistently high pledging of stakes by promoters, as in the past, there have been some instances of these founders defaulting on the loan, forcing the lenders to sell the pledged shares in the open market to make up for the non-payment. "A higher amount of shares can be pledged if the share price falls, as part of margin call; however, this is not a concern unless the increase is substantial of around 30-40%," said Bhandari.
India Today
15-05-2025
- Business
- India Today
Mutual funds load up on IT, cut FMCG and telecom stakes in April: Report
Indian mutual funds turned buyers in the IT sector this April, even as foreign investors pulled out large sums. This came during a time of uncertainty caused by weak earnings and concerns over US growth due to tariff to Primedatabase data, mutual funds invested over Rs 9,599 crore in IT shares during the month. In contrast, foreign institutional investors (FIIs) sold more than Rs 15,000 crore worth of tech stocks, as per NSDL FIIs, mutual funds release detailed monthly reports showing exactly where they've put their money. This gives a clearer picture of stock-wise IT companies, Infosys saw the highest interest from mutual funds, with fresh investments of Rs 3,011 crore. Tata Consultancy Services (TCS) and Coforge followed, receiving Rs 2,375 crore and Rs 1,432 crore, respectively. Other major names that drew investment included HCL Technologies, Persistent Systems, Mphasis, LTIMindtree, Hexaware, and Cyient, with amounts ranging from Rs 170 crore to Rs 960 mutual funds did sell shares of some tech firms. They reduced their holdings in Tech Mahindra by Rs 270 crore and also cut down on Birlasoft and Zaggle Prepaid, selling more than Rs 85 crore each. Smaller cuts were made in Oracle Financial Services, Affle, Neweb Technologies, and Inventurus Knowledge both mutual funds and FIIs put money into financial stocks. MFs invested Rs 4,450 crore in this space, while FIIs were even more bullish, pouring in Rs 18,409 Mahindra Bank attracted the highest MF investment in the financial sector, with Rs 1,586 crore. IDFC First Bank and HDFC Bank followed, drawing Rs 1,150 crore and Rs 1,026 crore. Other financial names that saw increased MF holdings included Max Financial Services, Axis Bank, HDFC Life, RBL Bank, and Shriram the other hand, mutual funds pulled money out of the telecom and FMCG sectors. They sold Rs 2,787 crore worth of telecom shares and Rs 2,211 crore in FMCG stocks. Interestingly, FIIs did the opposite, buying Rs 4,648 crore worth of telecom shares and Rs 2,917 crore in Airtel saw the biggest MF exit in telecom, with Rs 2,499 crore worth of shares sold. Indus Towers and Bharti Hexacom followed with sell-offs of Rs 584 crore and Rs 173 FMCG, the biggest drop came in ITC, where MFs reduced holdings by Rs 2,779 crore. HUL and Marico also faced selling of Rs 596 crore and Rs 382 crore. Other FMCG companies that saw mutual fund exits included Nestle India, Tata Consumer Products, United Spirits, and Avanti Watch advertisement
