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Many promoters lose pledged shares after market mayhem

Promoters of more than 50 cos were able to provide top-up in terms of additional securities.

Lenders invoke pledges in companies such as JustDial, Rel Capital & Eveready.

Promoters of over a dozen firms have been forced to let go of pledged shares as many of them struggled to raise money in time to top up the value of their collateral in the recent market crash.

Lenders have invoked promoter shares in companies such as JustDial, Asian Hotels (North), Reliance Capital, Eveready Industries, Reliance Home Finance and Mandhana Retail in the past month. The more deep-pocketed promoters of over 50 firms managed to bring in fresh shares to make up for the decline in collateral.

In these cases, the lenders may have transferred the holdings to their accounts, but it is not clear whether they have been sold.

In the case of Reliance Capital, Axis Trusteeship Services invoked shares that constitute nearly 15% of the company’s total equity earlier this month. Reliance Capital shares have fallen 75% in the past month. Shares of Anil Ambani-led firms such as Reliance Home Finance, Reliance Communications and Reliance Naval were also invoked by lenders.

“There is a high possibility that pledged shares would be liquidated, or invoked and sold in the open market if the slide in these stocks continues,” said G Chokkalingam, CEO, Equinomics Research & Advisory. “This may result in promoters losing their ownership, as has happened in so many cases earlier.”

On March 5, HDFC invoked 3.2 million shares of Eveready Industries pledged by promoters Williamson Magor & Co. Lenders have also invoked shares of companies such as Asian Hotels (North), JustDial, Mandhana Retail and Arcotech.

Meanwhile, the promoters of more than 50 companies were able to provide top-up in terms of additional securities in the ...

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