Just how much money is at stake in shares pledged by promoters of publicly listed companies of India Inc to raise loans? There is no official data yet, but estimates by market experts say the figure is at least Rs. 50,000 crore.
The fall in market valuations has led to a situation where lenders are asking for top-up cash from the promoters in question, with the collateral appearing risky.
Leading players in the market, including chief executives of well-known financial service companies, are wary of being identified on the sensitive issue taking centre-stage in the backdrop of the corporate fraud in Satyam Computer Services involving promoters who pledged their controlling stakes.
“The amount of shares pledged by promoters would easily run over Rs 50,000 crore,” said a well-known financial market expert.
“The amount of pledging with NBFCs and banks is over Rs 10,000 crore each, shares worth at least Rs 25,000 crore is pledged with foreign institutional investors,” he added.
A source from the mutual fund industry said mutual funds also had pledged shares worth a minimum Rs. 2,500 crore.
The Securities and Exchange Board of India (Sebi) on January 21, made it mandatory for the promoters to disclose the pledged shares details in listed entities.
As per the data available for 2,520 companies listed at the Bombay Stock Exchange, Indian promoters hold 50.4 per cent of the market capitalisation of these companies, which is now about Rs 28 lakh crore.
“Rs 50,000 crore is a rough approximation as there is no record on pledging, which is unorganised and lacks transparency,” said the head of a top broking firm.
“In cases where share prices have fallen by over 33 per cent of their value since they were pledged, lenders are not asking for additional shares but are asking for cash top-up which is making the situation critical,” said a fund manager at a leading mutual fund.
A source in the mutual fund industry told on condition of anonymity, “The details once come would have lot of surprises and big names from big companies would emerge.”