Asian Paints, JSW Steel among 4 Nifty stocks with pledged promoter holding above 5% in Dec qtr

Nifty constituents IndusInd Bank, Apollo Hospitals Enterprises, Asian Paints and JSW Steel are companies with more than 5% of pledged promoter holdings according to a note published by Kotak Institutional Equities. At 50.9%, IndusInd Bank has the highest pledged holdings by a promoter among the Nifty companies. The pledged holding shot up by 5.4% in the December ended quarter vis-a-vis the September quarter.

It is followed by JSW Steel (14.1%), Apollo Hospitals (13.5%) and Asian Paints with pledged promoter shareholding at 14.1%, 13.5% and 9.2%.

The value of promoter pledge in case of IndusInd Bank stood at Rs 5,740 crore at the end of the December quarter. For JSW Steel, it was Rs 7,330 crore. The value of pledged promoter shareholding for Apollo Hospitals and Asian Paints at Rs 4,140 crore and Rs 10,610 crore, respectively.

Kotak Equities analysed the pledged shareholdings of BSE-500 companies and found that the promoters of 69 companies have pledged a part of their stake in respective companies as on December 31, 2024 ended quarter.

The value of pledged promoter holdings stood at Rs 1.63 trillion at the end of the December quarter, which is about 0.4% of the total BSE-500 index’s market capitalisation. The Kotak note also revealed that the value of the promoter (majority shareholder) pledged holding as a percentage of the promoter holding declined to 0.84% in the December 2024 quarter from 0.87% in the September ended quarter.
The pledging of shares does not necessarily imply that a company or a promoter is under financial stress and could simply mean that the banks (lenders) may have sought additional security in the form of promoter shares.

The note also revealed that the promoter pledge holdings went up at a fastest clip in nine stocks in the December ended quarter. Apart from IndusInd Bank, the steepest increase was seen in Anand Rathi Wealth, Ashok Leyland, Anupam Rasayan and Laurus Lab at 4.3%, 2.9%, 2.7% and 2.7%, respectively. Others like GMR Airports, Asian Paints, Medplus Health Services and Emami also witnessed an uptick between 2.4% and 1%.

Moreover, there were ten stocks where the promoter pledge fell. The sharpest fall of 3.9% was seen in Swan Energy and it was followed by Krishna Institute of Medical Sciences (KIMS), Sun Pharma Advanced Research, Aurobindo Pharma and Chambal Fertilizers & Chemicals. The decrease was between 3.2% and 2.5%. Other stocks where pledged promoter holding saw a decline are Hindustan Zinc (1.9%), Ramco Cements (1.5%), UPL (0.9%), Asahi India Glass (0.5%) and Apollo Hospitals (0.5%).

Also Read: PSU bank stocks crack up to 34% in the past one year. Is it time to exit?

The report compares changes in pledged holdings between the September 2024 and December 2024 quarters. Changes in pledged holdings after December 2024 have not been incorporated in this report.

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