Rising promoter pledge singes Kalyan Jewellers stock
Subscribe to enjoy similar stories. Panicky investors hammered the shares of Kalyan Jewellers Ltd following a stock market disclosure on Monday that the company’s promoters had pledged an additional 5.79% of their shares last week. That takes Kalyan Jewellers’ total promoter pledge to 25.87%, per BSE data.
The stock had lost a third of its value despite Kalyan Jewellers’ management early last week seeking to quash rumours of a tax raid and of bribes paid to a fund manager to inflate the stock. On Tuesday, the stock cracked another 8%. After Tuesday's fall, the stock is down nearly two-fifths of a percent at ₹488.35 per share, down from its record high of ₹795.4 on 2 January.
On Thursday, 16 January, the stock exchanges banned fresh trading of Kalyan Jewellers’ stock futures and options contracts in the derivatives segment after trader outstanding positions in the counters came close to the threshold or limit for such positions. While Kalyan Jewellers officials were not available for comment immediately, a person familiar with the developments said the additional share pledge by the promoters was to comply with the requirements of an existing loan. “The additional pledging of shares last week by the promoters was to comply with the maintenance requirements of an existing loan, availed in September to increase their stake in the company," said this person, declining to be identified.
“This adjustment is a routine measure in response to share price fluctuations in a bearish market." Kalyan Jewellers’ promoters, including T.K. Seetharam and T.K. Ramesh Kalyanaraman, had pledged stakes amounting to 20.08% of the total promoter holding of 60.47% in September to fund the purchase of a 2.36% stake in the company that was being
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