Ownership Risk

Invocation of Promoter Pledged Shares Peaked in Sep’20

Rs. 11 bn worth of promoter pledged shares invoked in September 2020

A substantial pledging of shares by the promoters is a potential red-flag for the lenders as it indicates the stress that has piled up on corporate finances.

Moreover, a significant drop in a company’s share price may result in the invocation of pledged shares. It may also lead to a loss of management control for the promoters.

An analysis of corporate disclosures to the stock exchanges showed that Rs. 11 Billion worth of promoter pledged shares invoked by the lenders in September was the highest among any of the months so far in this calendar year.

Source: BSE

The lenders have invoked the promoter pledged shares of 12 companies in September. Future Group and Zee Group companies were hit hard due to invocation of promoter pledged shares by the lenders in the previous month.

Source: BSE

If you were unable to spot red-flags related to the pledging of shares or invocation of pledged shares, Amukha’s Risk Analytics System (RAS) is here to help you!

RAS is an innovative application that provides early warning signals by analyzing traditional and alternative datasets for identifying distress sectors and companies ahead of time.

To know more about RAS, email us at info@amukha.com.

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