What does it mean to shareholders when promoters held majority of their shares in pledged quantity

1 Like

The reason for pledging would be to get more funds for closing pressing debts or for compensating the losses in a way.

Promoter shares and held by promoter group only. The shares will shareholders are what open to public or other institutions.

Definitely, a pledged promoter share is not a good sign for the company. Many companies has gone to abyss if they could not recover from their situation.

If you are trying to invest, avoid such companies with promoter shares pledge. Stock price could plummet anytime.


Means: The company or scrip is not really good to buy for a long term, the Promoters have already raised money by pledging shares (already in debt). So it is not a good idea to buy these type of companies.

But some companies do recover, not necessarily every companies stay pledged.