Religare Broking

In the last few weeks, we have seen a number of large companies getting hit by the sale of pledged shares. This is not the first time it has happened and has been seen before too. But the magnitude of pledged shares has really grown in the recent past. For example, the BSE data estimates that a total of 2942 companies have promoters pledging shares on behalf of the company totaling to Rs.2.15 trillion. Also, the top 100 borrowers have pledged more than 80% of promoter stake making them really vulnerable.

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The Parliamentary Panel on the IL&FS fiasco has made some scathing remarks about the role of LIC in the IL&FS story as well as the role of the credit rating agencies. It is actually time to look at 5 key stakeholders who did not live up to expectations in the IL&FS episode.

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The CRPF attack may have been the worst in Kashmir since 2001. But, two things stand out in this case. Firstly, the outpouring of popular support appears to be immense. Secondly, the current government has made its intent clear. While the right diplomatic noises are already being made, the Indian government must actually use its increased economic clout to make a strong statement.

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The 2008 Hollywood movie, The Curious Case of Benjamin Button, chronicles the story of a man who reverse-ages. He starts out as an old and then becomes younger as years pass by. In a way that is what Essar Group reminds of today! A group that had almost given up on all its businesses has suddenly come back to claim its rightful place in the pantheon of Indian family businesses. But first the Essar Steel controversy!

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Few companies in the Indian context have imploded as gradually yet as inexorably as Reliance Communication. The company has been blaming the NBFCs like Edelweiss Finance and L&T Finance for disposing shares in the market with malicious intent. However, the financers had little choice with the stock price of RCOM falling vertically. Pledged shares, as we have seen in the past, can be a double whammy for companies and RCOM and the entire ADAG group was no exception.

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