Companies & Sectors
Pledging of shares by NSE-listed companies' promoters at 7-year high
Not considered a good sign by investors, the pledging of shares by promoters of the 1,517 NSE-listed companies has risen to a seven-year high at Rs2.08 lakh crore with companies like TCS and Cairn India leading the way, says a report by PRIME Database.
 
"Across all NSE listed companies (including companies with no pledging), the percentage of promoter holding pledged went up from 15.57% a year back to 16% on June 30, 2016 (further increased to 16.21% as on August 11, 2016)," Pranav Haldea, Managing Director of PRIME Database, said.
 
In value terms, promoters' share pledging went up to Rs 1.98 lakh crore as on June 30, 2016 compared to Rs 1.77 lakh crore as on June 30, 2015 (further increased to Rs 2.08 lakh crore as on August 11, 2016), the report said.
 
According to Haldea, this can be attributed mainly to the rise in share prices. 
 
The high pledge levels, however, are typically not considered a good sign by the investors as a downturn in the market price can lead to invocation and change in management, he said.
 
Shares were pledged in as many as 522 companies of the 1,517 NSE-listed companies as on August 11, 2016, with Tata Consultancy Services (TCS), Adani Ports, Cairn India, JSW Steel among the top companies by value of pledged shares.
 
Surprisingly, there were as many as 31 companies in which the complete holding (100 per cent) of the promoters was under pledge as on June 30, 2016, including Bajaj Hindusthan Sugar, Bharati Defence and Infrastructure, IL and FS Investment Managers, Ind-Swift Laboratories, IVRCL, JMT Auto, MSP Steel and Power, Reliance Defence and Engineering and Visa Steel. 
 
Overall, there were 204 companies in which the percentage of promoter holding pledged increased in this period.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

 

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COMMENTS

Ramesh Poapt

9 months ago

TCS and JSW steel as major pledgers?TCS- surprising!

Reliance Jio tests nothing but commercial operations: COAI
Existing operators shot off another letter to the government on Monday and said 2.5 million users for Reliance Jio constituted a commercial launch, seeking to counter the company's claim that it is testing its network now to offer superior quality services later.
 
Under the umbrella of Cellular Operators' Association of India (COAI), the letter addressed to Nripendra Misra, Principal Secretary to the Prime Minister, alleged the government, in the process, was also losing revenue.
 
It said the data generated by Jio is rivalling the combined traffic of the rest of the operators who have been in operation for 15-20 years. Under the name of LYF (Jio brand for handsets), the company is using spectrum allocated for commercial use yet not yielding any revenue and consequently no share to the government.
 
Talking about the bundle offerings by Jio, COAI said: "Such bundled sale and purchase have not been to a few hundred, but to millions of customers, across thousands of cities, fetching hundreds of crores of rupees, making them large scale nationwide commercial operations going on for months."
 
Reliance Jio on Aug 18 has strongly refuted the claims of the COAI that its members are providing sufficient inter-connection points for its 4G services, saying the reality was that such access was grossly inadequate.
 
The reaction follows a statement by the industry body a day before on behalf of its members, rejecting the request from Reliance Jio for additional points of inter-connect from its member companies on the ground that optimal links have already been provided.
 
Prior to this, in a letter to the watchdog, Reliance Jio had requested for directives to the existing service providers to immediately provide interconnection to its Jio 4G network with their own, in the spirit of the licensing agreements.
 
But the members of COAI, through letters to the government and the watchdog, had alleged that Reliance Jio had already launched a full commercial service in the garb of test runs. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

 

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Nifty, Sensex look weak – Monday closing report
We had mentioned in Friday’s closing report that Nifty, Sensex were stalling on lower volumes. The major indices of the Indian stock markets suffered a minor correction on Monday and closed around 0.40% lower than Friday’s close. Investors were cautious and the lower NSE volumes were a clear indicator of uncertainty. The trends of the major indices in the course of Monday’s trading are given in the table below:
 
 
Key equity indices traded in the red, as selling pressure was witnessed in automobile, information technology (IT) and healthcare stocks. The BSE market breadth was slightly tilted in favour of the bears -- with 1,463 declines and 1,254 advances and 202 unchanged. On the NSE, on Monday, there were 702 advances, 889 declines and 264 unchanged.
 
The indices opened on a flat note with a slightly negative bias following cues from negative Asian markets. The markets also traded with apprehension as caution prevailed ahead of a speech by Federal Reserve Chair Janet Yellen later in the week. Further, investors were seen cautious after government's decision on Saturday to appoint economist and banker Urjit R Patel as the next Governor of the Reserve Bank of India (RBI). Moreover, a weak rupee and lower crude oil prices also dented investors' sentiments.
 
The appointment of Urjit Patel, as Governor of the Reserve Bank of India (RBI), effective from September 4, has naturally raised expectation among those who were critical of outgoing Governor Raghuram Rajan for not easing enough the monetary policy by cutting rates. Since January 2015, Rajan has cut lending rates by 150 basis points (bps) but banks have only cut their interest rates by about half of that. To nudge banks to transfer the benefit of rate cuts, Rajan even announced a shift to the marginal cost of lending (MCLR) regime. Under the MCLR, banks need to consider their marginal cost of funds, or the cost incurred on incremental deposits across different maturities, to decide on interest rates. However, three months after the MCLR was launched on April 1 this year, banks have hardly cut their lending rates. A lower interest rate regime is likely to push the bulls in the stock market forwards.
 
Coal India on Saturday said its workers will go on a nationwide strike on September 2 to protest against divestment and strategic sale in the nationalised coal sector and to demand higher social security measures and recruitment drives. "We have received a communication of strike notice... for general strike on September 2. Efforts are being made for conciliation process," the coal behemoth said in a regulatory filing to the Bombay Stock Exchange. "In case they resort to strike, it will affect product and dispatch of coal," the filing said.  Almost five lakh bank union staff and officers are likely to join the strike on September 2 to protest against the "anti-people policies of the Modi government and labour reforms". Last year, coal production took a substantial hit due to a strike called by trade unions. Major trade unions like INTUC, AITUC and CITU called for the one-day strike. The unions demanded a stop to the disinvestment of Coal India, end to allocations of coal blocks to private companies, settlement of wage revision of contact workers as well as outsourcing workers working in the coal industry. Coal India shares closed at Rs335.40, up 0.36% on the BSE on Monday.
 
In the Goods and Services Tax (GST) regime, exporters will need to adapt as exemptions and incentives given to promote exports will go away, a senior official said on Saturday. "Once the GST is implemented, exemptions and incentives will have to go away," Union Commerce Secretary Rita Teaotia said. "Philosophically, we are moving in the direction of creating a conducive policy and economic environment for everybody across the country and that is the intention of the GST law," she added. "In a fragmented system, there could be cascading effect of taxes and local duties, but to offer a level-playing field "the requirement of incentives and subsidies would certainly need to be moderated and modified". But that would be taken up subsequently," she said at a session organised by the Engineering Export Promotion Council, Federation of Indian Export Organisations, Assocham, Bengal Chamber of Commerce and Industry and Gem Jewellery Export Promotion Council. She said the GST law would be framed by the Revenue Department, not by the Commerce Department. With the rupee stabilising against the dollar, there would be no need to promote exports or have excess protectionism on the part of the government in its policies and the stock market would also not give higher weightage to exports over domestic sales in the case of listed companies.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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