Shares which i want to pledge should be freely available or can i also pledge the shares which are in lock-in period? Will there be any difference in hair cut

Shares which i want to pledge should be freely available or can i also pledge the shares which are in lock-in period? Will there be any difference in hair cut.

1 Like

You cannot pledge locked-in shares at brokers (eg, at Zerodha). This is because locked-in shares cannot be moved out of the demat account before the lock-in period is over. In case of pledge, you would need to move the shares out of the demat account.

I am not sure whether even banks or finance companies would allow you to take loans against pledge of these shares (ie, without transferring these shares out of the dmat account), as there would be a liquidity contraint in selling the shares in case of default.

1 Like

what do you mean by a lock in period?

The shares which are not allowed to sell till the period is over. For eg:- Promoters’ Contribution
which is subject to lock-in for three years & ESOPS .

Hi, we can pledge the locked-in shares, yes as you said it can’t be invoked unless release of lockin period.