Equity pledging : dilemma of retail investors /
The case discusses the dilemma faced by retail equity investors who have invested in companies in which promoters had pledged their equity against personal borrowing. Equity pledging by promoters was a global phenomenon with greater numbers and more frequent pledging in developing and underdeveloped...
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| Format: | eBook |
| Language: | English |
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London :
SAGE Publications: SAGE Business Cases Originals,
2022.
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| Series: | SAGE Business cases.
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| Subjects: | |
| Online Access: | Connect to the full text of this electronic book |
| Summary: | The case discusses the dilemma faced by retail equity investors who have invested in companies in which promoters had pledged their equity against personal borrowing. Equity pledging by promoters was a global phenomenon with greater numbers and more frequent pledging in developing and underdeveloped financial markets than in developed financial markets. Between 2009 and 2019, equity pledging increased significantly in Indian firms. Many promoters defaulted in margin calls and lenders were forced to sell their shares. Due to this forced sell by lenders, retail and marginal equity investors suffered huge losses. However, fear of a price crash was still prevalent for other firms in which promoters had pledged their equity holdings. Students will be asked to evaluate the risks of retail investors invested in firms with promoter pledged shares and market-wide implications of increased share pledging activity. |
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| Physical Description: | 1 online resource : illustrations. |
| Bibliography: | Includes bibliographical references and index. |
| ISBN: | 9781529795387 1529795389 |