Shares of Kalyan Jewellers have lost 36% of their value in January so far, which in turn has resulted in an increase in promoter pledging to nearly 25% from 19.3% seen at the end of December 2024. The owners of the company created a maiden pledge during the September quarter, according to data compiled from the BSE.

Two promoters of the Jewellery maker — Ramesh Trikkur Kalyanaraman and Seetharam Trikkur Kalyanaraman, who each owned an 18.04% stake in the company, created additional pledges of 2.6% and 2.9% respectively, on Monday (January 20). Similarly, the promoter pledging at Asian Paints has increased to 9.2% in the December quarter from 7.7% seen at the end of September 2024. The stock of Asian Paints has corrected as much as 33% from its September high.

Other companies that have seen a similar rise in promoter pledges during the quarter include Medplus Health Services and HFCL. Both of them have seen their pledged shares as a percentage of promoter holding increase by 1.03 percentage points (ppts) and 1.03 ppts respectively, from the September quarter. HFCL shares have corrected as much as 37% from their September highs.

Also Read: Kalyan Jewellers shares have lost ₹30,000 crore in market cap after another 20% weekly drop

The quarter also witnessed promoters of Ola Electric and Laurus Labs raising money by pledging their holdings. During the first week of December, Ola Electric founder Bhavish Aggarwal pledged 3.6% of his shareholding as part of a non-disposal undertaking signed with the borrower. Additionally, promoters of pharmaceutical company Laurus Labs created a fresh pledge of 2.7% of their holding in the December quarter.

It’s to be noted that when the pledged shares face margin pressure, lenders would ask for more shares from promoters so that they can protect the value of collateral shares. Moreover, if promoters fail to meet margin requirements, shares pledged with lenders may get sold in the open market, resulting in more correction in the stock prices of such companies.

The analysis is based on 361 companies from the BSE500 index for which shareholding data for the December quarter has been released so far. However, It must be noted that company promoters pledging shares does not necessarily mean that either the company or its promoter is going through financial stress. Yet, the creation of a pledge often spooks investor sentiment, resulting in a selloff in the company’s shares.

Also Read: Mankind Pharma pledges additional stake in Bharat Serums and Vaccines to secure NCDs