In some cases, the promoters have raised money in the unlisted holding companies through which they hold shares of the listed companies.
The effect of a crash in the Zee group companies, including Zee Entertainment and Dish TV shares, was visible in the stocks of companies where promoters have pledged their holdings. Zee Entertainment and Dish TV lost nearly 30 per cent on Friday due to the sale of the pledged promoter shares in Dish TV.
The biggest losers on Monday were the shares of Adani Group companies – Adani Power and Adani Ports and SEZ. Promoter holdings across Adani group companies are pledged. A high debt in the group companies led to panic in the two group company shares, which fell 19 per cent and 13 per cent, respectively. Shares of Indiabulls group companies – Indiabulls Real Estate and Indiabulls Housing Finance, Reliance ADAG group companies and DHFL reported similar falls. Shares of these companies were down 5 per cent to 12 per cent.
In some cases, the promoters have raised money in the unlisted holding companies through which they hold shares of the listed companies. The underlying collateral is mostly the shares of the listed companies. Any likelihood of the holding company not able to meet its debt obligations may lead to selloff in the counters of the listed companies. For instance, Wadhawan Global Capital, Cyquator and Geetanjali Trading and Investments the holding companies of DHFL, Zee Entertainment and Asian Paints, respectively, have raised money from mutual funds.
