Pledging of 100% shareholding by promoters a potential red-flag for banks

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red-flagsHeckyl Credit Risk Early Warning System captures company-related red flags based on a variety of business rules. We have analyzed the data around pledging of shares by promoters of listed companies.

In our view, pledging of stake by promoters is a potential red-flag for lenders as it a) indicates the stress that has piled up on corporate finance and b) it may lead to loss of management control for the promoters in case of invocation of shares.

Out of the listed companies’ universe, 4 listed companies qualified the following two conditions: 
a) Promoters pledged nearly 100% of their shareholding
b) Pledged shares as a % of the company’s equity capital is more than 10% 

#1. Jindal Stainless (Hisar) Ltd

#2. Kesoram Industries Ltd

#3. Mercator Ltd

#4. Arcuttipore Tea Company Ltd

If you were unable to spot red-flags related to pledged shares, Heckyl can help you!

To know more about Heckyl Credit Risk Early Warning System, email us at info@heckyl.com

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