Zee group, Anil Ambani firms lead in share pledges

Mumbai: Two companies led by Anil Ambani feature in a list of publicly traded firms with over 95 percent of their promoter shareholding pledged as of March 2019, says a report.

Zee Entertainment and Dish TV, the companies from the Subhash Chandra-led Essel group, have their promoter pledging 66.2 percent and 94.6 percent of the ownership pledged, respectively and lead the chart.

A report by brokerage Kotak Institutional Equities comes amid issues over pledged shareholding of promoters after the NBFC crisis that began with the defualts of IL&FS last September, where massive share price erosions have led to a slew of unprecedented actions, including the financiers being dragged to courts for taking precautionary measures.

Promoters typically raise money for their other businesses by pledging a part of their holdings in listed entities as a security.

The Anil Ambani-led Reliance group and Essel group have had the going tough. The promoters have pledged 98.3 percent of the holding in Reliance Infrastructure and 96.9 percent in Reliance Capital, the report said.

The report, which is based on an analysis of top 500 listed firms on the BSE, said percentage of pledged promoter holdings by value has come down in the March 2019 quarter in comparison to the preceding December quarter.

The percentage of pledged promoter holdings declined to 2.83 percent in March quarter from 2.98 percent in the December 2018 quarter, it said.

Promoters pledged share outstanding stood at Rs 1.95 lakh crore, which is about 1.38 percent of the market capitalisation of the BSE-500 Index as of March, it said, adding of the top-500, promoters of 116 companies have pledged their shares.

The Ambani group entities RInfra and Reliance Capital are among those where promoters have pledged over 95 percent of their holdings, and have the company of CG Power and Industrial and Sterlite Technologies, it said.