ESG: corporate governance

    Pledged shares as % of promoter holding

    Formula

    Pledged shares as % of promoter holding

    Pledged Shares (%) = (Promoter shares pledged or encumbered ÷ Total promoter shares) × 100

    Variables

    Promoter shares pledged or encumberedShares of the promoter and promoter group that are pledged or otherwise encumbered, including non-disposal undertakings
    Total promoter sharesAll shares held by the promoter and promoter group

    Finding the inputs

    The quarterly shareholding pattern on BSE and NSE shows both numbers for each promoter entity. Event-level detail, including lenders and reasons, is in the SAST pledge disclosures on the exchange websites.

    Reading the number

    Also calculate pledged shares as a percentage of total share capital. SEBI requires detailed reasons when combined encumbrance reaches 50% of promoter holding or 20% of total share capital. As a working guide, not a legal limit: below 10% is low concern, 10% to 50% needs a clear reason, and above 50% is high risk. The trend over several quarters, the type of lender and the purpose of the loans matter as much as the level.

    Illustrative example