You are here: Home » PF » Features » Investments
Business Standard

Pledging of shares at seven-year high: study

Priya Nair 

What does it mean if the shares of a company are pledged by the promoter? Pranav Haldea, managing director of Prime Database, says pledging of shares by promoters is by itself not a bad thing, as it is the fastest and cheapest way to raise funds.

But, a combination of high levels of promoters pledging shares, high debt and bad financials can be risky. "While there is no scientific number to the percentage of promoters' shareholding under pledge, if it is more than 50-60 per cent, I would stay away from such companies. Additionally, if there is a market correction and share prices ...

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sun, August 28 2016. 22:25 IST