Understanding Quality through the Price-to-integrity Ratio
Our markets have become very exciting. Each day, a new stock falls victim to discovery of impropriety in the company or the promoter or management or some regulatory action. In such situations, stocks fall sharply because nobody wants to buy into uncertainty, that too when there are questions about governance.
 
And then there is a rush by promoters to deny or defend the...
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Promoter Share Pledging within BSE200 at 8-year High to $ 21 Billion: Report
Few corporate governance issues of late have hurt market sentiment and raised investor concern on companies, as has high promoter share pledging. During the quarter ended December 2018, promoters of BSE200 companies have pledged shares worth $21 billion, says a research note.
 
In the report, Axis Capital Ltd says, "Our analysis for quarter ending December 2018, shows aggregate pledging activity of promoters within BSE200 is at an eight year high. Total shares pledged are at about $21 billion, which is 13% of promoter equity. When compared to market capitalisation, it is 7.1% of companies pledged and 1.3% of BSE200."
 
 
"Sectors where aggregate promoter pledge has soared during December quarter are consumer durable (CG Consumer), media (Zee Entertainment Enterprises Ltd -Zee), metals (Jindal Steel and Power Ltd- JSPL, JSW Steel) and retail (Future Retail, Jubilant Food)," the report says.
 
 
NIFTY companies with pledged promoter holding of higher than 25%, include Zee, Adani Ports, JSW Steel and IndusInd Bank. 
 
 
Companies where promoter pledge has risen steadily in past few quarters include Emami, JSW Energy, Reliance Infra, while Adani Power, Asian Paints, Mahindra and Mahindra Ltd (M&M) witnessed a decline in promoter pledge during the same period, Axis Capital says.
 
 
JSPL, Crompton Greaves Consumer Electricals Ltd, JSW Steel, Jubilant Food, Emami, Sun Pharma, GMR Infra, AU Small Finance Bank Ltd, Max Financial, JSW Energy are the companies that witnessed maximum increase in promoter pledge on a quarter-on-quarter (q-o-q) basis. 
 
On the other hand, Adani Transmission, Indiabulls Housing, M&M, Adani Power, Adani Ports, Motherson Sumi, Asian Paints, and IndusInd Bank witnessed decrease in promoter pledge on a q-o-q basis, the report says.
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COMMENTS

DHARMENDRA GUPTA

4 weeks ago

I understand that shares of Sterlite Tech is also pledged -- am I wrong ?

Prafull Pandav

4 weeks ago

Can you pkease explain the significance of this for a common investor?

manoj dubey

4 weeks ago

thankx good information

Nifty, Sensex still under pressure – Tuesday closing report

We had mentioned in Monday’s closing report that Nifty, Sensex were looking weak. The major indices of the Indian stock markets were range-bound on Tuesday and closed with losses over Monday’s close. On the NSE, there were 992 advances, 705 declines and 366 unchanged. The major trends of the Indian stock markets during Tuesday’s trading are given in the table below:

 

 
The Sensex advanced on Tuesday a few points, as it opened higher with key banking and finance sectors gaining. All the sectors on the NSE traded in green, as well, except for IT (information technology), Pharma and Media stocks as the Indian rupee slid against the US dollar on Tuesday. On Monday, foreign institutional investors (FIIs) were net sellers and the domestic institutional investors (DIIs) were net buyers. FIIs sold stocks worth Rs1,239.79 crore while the DIIs bought stocks to the tune of Rs2,336.74 crore.
 
The Emami Group's stocks rose sharply by over 14% on Tuesday after the group promoters sold their 10% stake in Emami Limited, raising about Rs1,600 crore to reduce debts. After the sale, the promoters' holding in the company stood at 62.74%. The transaction was executed on the stock exchange on Monday and purchasers included SBI Mutual Fund, PremjiInvest, Amundi, IDFC, L&T Mutual Fund and Pioneer Investment. "The stake sale proceeds will reduce promoter debt, which was used in creation of assets like cement and solar power," the company said. Commenting on the divestment, Director of Emami Limited Mohan Goenka said: "We have concluded a stake sale which will ease the liquidity position of the promoter group and reduce the debt." He also said the promoters are committed to maintaining their significant majority stake in the company and "do not anticipate any further dilution of stake in the foreseeable future". Emami shares closed at Rs407.50, up 12.58% on the NSE.
 
The government has decided to give a push to its strategic disinvestment plan within the current fiscal year itself by clearing sale of 100% stake in three special steel producing units of Steel Authority of India Ltd. (SAIL), including Salem Steel and Alloy Steel Plant. Sources said that the Prime Minister's Office has accorded its approval to the sale and Department of Investment and Public Asset Management (DIPAM) will now start the process of appointment of transaction advisors to conclude the deal quickly. The three units of SAIL identified for strategic disinvestment includes Visveswaraya Iron and Steel Plant, Bhadravati, Karnataka, Salem Steel Plant, Tamil Nadu, and Alloy Steel Plant, Durgapur, West Bengal. All these units of the steel giant have been consistently making losses and sale has been considered the best option. The disinvestment of these units will be to strategic buyers to be identified through a two-stage auction process. Sources said that with the steel market on the upswing again, the units could realise good value. Companies like JSW Steel, Vedanta, Tata Steel, ArcelorMittal have been in a look-out for new assets. However, the likely amount to be mobilised could not immediately ascertained. Steel Authority of India shares closed at Rs46.15, up 3.94% on the NSE.
 
Massive turbulence continued to hit the Indian airline sector as even the formidable passenger carrier IndiGo now faces headwinds of pilot shortage leading to a truncated flight schedule and consequently a dive in its stock price. Lately, the Indian airline sector has been hit by the double-whammy of high crude oil prices and low fares, leading players like Jet Airways either deep into red or asset restructuring programmes just to keep the company afloat. Interestingly, some industry insiders have termed IndiGo's case as unique, where the airline has over 200 pilots, commands the majority domestic market share but also faces shortage of pilots to maintain its schedule of over 1,300 flights a day. Since February 9-10, the airline has cancelled over 300 flights but this figure has been widely disputed by industry sources. InterGlobe Aviation shares closed at Rs1,102.50, down 0.33% on the NSE.
 
IT (information technology) major Infosys Ltd has paid Rs34 lakh to settle a case related to alleged lapses regarding a severance payment done in 2015, Securities and Exchange Board of India (SEBI) said in an order.
"The proposed adjudication proceedings for the defaults... are settled," the market regulator said in a settlement order dated February 15. "SEBI shall not initiate any enforcement action against the applicant for the said defaults," it added. SEBI, in 2017, had issued a notice seeking to initiate adjudication proceedings against the company. The notice was with regard to the examination in the scrip of Infosys. During the examination, SEBI probed the issues pertaining to severance payment made by Infosys to its former Chief Financial Officer Rajiv Bansal who had resigned from the company on October 11, 2015. "The examination prima facie revealed that the severance payment was not in accordance with the remuneration policy and the same was without the approval of the Nomination and Remuneration Committee," it said. Further, the payment had no prior approval of Audit Committee and the company failed to make detailed and timely disclosure of the severance agreement. Infosys shares closed at Rs724.00, down 2.30% on the NSE.
 
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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