Pledging of shares is not restricted to small and medium groups. With disclosure of share pledging becoming mandatory,Tata Steel on Monday said two of its promoters Tata Sons and Tata Investment Corporation have pledged 9.89 crore shares,representing 13.53 per cent stake in the company,with lenders. At Mondays market price of Rs 199.55 per share,this stake is worth around Rs 1,978 crore.
Another Tata group company,Tata Teleservices (Maharashtra) Ltd (TTML),said its founders have pledged 94.28 crore shares or 49.7 per cent of its total equity capital. As the TTML share closed at Rs 23.05,the value of the pledged shares works out to Rs 2,168 crore. In a disclosure to the National Stock Exchange,Tata Steel said its holding company Tata Sons has pledged 9.64 crore shares,representing 13.19 per cent stake,with lenders. Besides,Tata Investment Corporation (TICL) has pledged 25 lakh shares,or 0.34 per cent,it added.
Tata Investment has pledged the shares as security for the Zero Coupon Convertible Bonds (ZCCBs) issued,which are fully convertible into equity shares of TICL. Hence,the pledge cannot be invoked as no payment obligations arise from the issue of the ZCCBs,it added. For the quarter ended December 2008,Tata Sons held 29.27 per cent stake in Tata Steel,while TICL held 0.43 per cent. The total promoter holding in Tata Steel was close to 34 per cent at the end of December quarter,according to shareholder information available on BSE.
Unlisted Tata Teleservices,which held 37.65 per cent of the telecoms services provider as of December 2008,has pledged 71.43 crore shares or 37.65 per cent. Tata Power Company which held 7.24 per cent,has pledged 8.28 crore shares or 4.37 per cent,while Tata Sons,which held 20.72 percent has pledged 14.57 crore shares or 7.68 per cent,the company said in a filing with the stock exchange. It said the equity shares of the company have been pledged by the founders only to provide security for its borrowings.
The disclosure follows market regulator Sebis mandate that listed companies should disclose information about shares pledged by the promoter group after it came to light that former Satyam Chairman B Ramalinga Raju had pledged almost his entire holding with financiers to fund plans of other family-related firms.