Stocks with High Promoter Pledge in India
Stocks with high promoter pledge in India: Have you ever thought that although the promoters of a company own shares in the company, there is a risk of the company being sold without their consent? Founders have a lot of influence in the game, but they also have to take on serious risk if the stock price falls. This highlights the volatile nature of high commitments, as market fluctuations and margin pressures can reduce promoters’ stakes and reduce their leverage despite significant initial investments.
This uncertainty undermines investor confidence and creates skepticism despite management’s good operations. In this post, we will take a look at some of the companies with high promoter commitments in India.
Stocks with High Promoter Pledge in India
High promoter commitment holdings have benefits, such as encouraging long-term value creation, but they also bring risks, such as leverage and governance issues. Promoters who have invested significant personal assets are motivated to make prudent decisions that promote growth. Funding through pledged shares can also fuel expansion and innovation.
However, high promises raise a red flag about risk and negative market perception. Thorough due diligence is important as the pros and cons must be carefully assessed before making an informed investment decision in a company with significant promoter commitments.
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High Promoter Pledge #1 Stock: IndusInd Bank
IndusInd Bank It is part of the Hinduja Group led by Srichand Hinduja and his brother Gopichand. The bank operates an extensive network of 2,903 ATMs and 2,631 branches across India. We also have representative offices in Dubai, London and Abu Dhabi.
The range of services includes vehicle loans, personal loans, microfinance, corporate banking, credit cards and customized loans for small and medium-sized businesses. midsize business (Small and medium-sized businesses). IndusInd Bank earned interest from treasury (13.18%), corporate or wholesale banking (26.41%), retail banking (60.23%) and other banking operations (0.17%) in FY23.
In the December 2023 quarter, promoters held 16.45% of the company’s shares. They pledged 45.48% of the company’s shares. In its latest filing, management acknowledged that while it missed higher-than-expected slippage this quarter, slippage will return to normal in the fourth quarter.
The primary focus is to grow retail loans and deposits, improve asset quality, and invest for future growth. The company’s net interest income recorded 130 million won. 17,592 crore compared to Rs. In FY22, it increased by 17.28% to $15,000 billion. Net profit recorded 160 million won. 7,444 crore in FY23 compared to Rs. It increased by 54.92% to Rs 4,805 crore in FY22.
High Promoter Pledge #2 Stock: Vedanta
Vedanta, formerly Sesa Goa Pvt Ltd. Vedanta Limited, known as Vedanta Limited and headed by Anil Agarwal, is a diversified natural resources company engaged in mining of minerals such as zinc, lead, silver, aluminium, copper and iron ore and exploration for oil and gas. It operates in India, South Africa, Namibia, Ireland and Australia.
The company has five main business segments: Oil & Gas, Aluminum, Copper, Iron Ore, and Power. The majority of its revenue comes from the aluminum segment. Recent records show that the oil and gas company recently proposed initial field development plans for an OALP field called Jaya. The plan is expected to generate $750 million in annual EBITDA through various bottleneck relief efforts.
Additionally, the Company has designed a strategic capital expenditure strategy of approximately $8.4 billion to drive growth in its various business segments. This investment is expected to increase sales by $4 billion and EBITDA by $1 billion.
From a financial perspective, net debt increased to Rs 62,493 crore in the third quarter of FY24, primarily due to capital expenditure and working capital requirements.
In FY23, Vedanta’s revenue was comprised of Zinc India (22.77%), Zinc International (3.58%), Oil & Gas (10.34%), Aluminum (36.03%), Copper (12.02%), Iron Ore (4.47%), and Power (4.95%) ), other (6.35%). Vedanta’s promoter stake was 63.71% as of December 2023 quarter, with 99.99% held as collateral.
The operating revenue of the company was Rs. 1,45,404 crore in FY23 compared to Rs. It increased by 10.83% to ₹1,31,192 crore in FY22. Net profit recorded 160 million won. 14,503 crore in FY23 compared to Rs. It increased by 63.48% to Rs 23,710 crore in FY22. Net profit margins are affected by high interest expenses.
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High Promoter Pledge #3 Stock: Aster DM Healthcare
Aster DM Healthcare, an India-based company founded in 1987, offers a wide range of healthcare solutions. The company operates in various segments of the healthcare industry, including hospitals, clinics, and retail pharmacies. Serving patients across a variety of economic sectors, Aster DM Healthcare provides healthcare services in several GCC states under brands such as Aster, Medcare and Access.
According to the company’s recently released report card, it plans to expand its hospital bed capacity in India from 4,800 currently to 6,600 by FY27, including 1,700 new beds. Focuses on brownfield expansion of existing clusters and greenfield projects in Kerala. An asset-light O&M model is being evaluated.
Pharmacies and laboratories are being expanded across existing hospital clusters to provide an integrated healthcare ecosystem. The myAster app will be launched in India to increase non-hospital revenue. As of the December 2023 quarter, the promoter stake in Aster DM is 41.88%. The promoters have pledged 98.87% of the shares.
In FY23, hospitals accounted for 56.94% of Aster’s sales, clinics 19.89%, retail pharmacies 22.90% and others 0.24%. In FY23, GCC countries accounted for 75% of revenue, with India accounting for the remaining 25%.
The operating revenue of the company was Rs. 11,932.88 crore in FY23 compared to Rs. It increased by 16.38% to ₹10,253.28 crore in FY22. Net profit recorded 160 million won. 475.49 crore in FY23 compared to Rs. It declined by 20.89% to ₹601.05 crore in FY22. The decline in net profit was due to higher purchases of pharmaceuticals and consumables and higher labor costs compared to sales in FY23.
High Promoter Pledge #4 Stock: Medplus Health Services
Medplus Health Services, founded in 2006 by Gangadi Madhukar Reddy, MedPlus aimed to build a trusted pharmacy retail brand and deliver medicines and enhanced value to customers through technology-driven supply chain efficiencies. Mr. Doctor and entrepreneur. Gangadi will play a pivotal role in driving the company’s strategic growth.
MedPlus operates more than 4,230 stores in 600 cities in 10 states and has more than 22,000 full-time employees engaged in various business operations. Its activities encompass retail and wholesale sales, manufacturing, contract manufacturing of private label pharmaceuticals, wellness and FMCG products, importing, distribution and aggregation. diagnostic center As of February 5, 2024.
According to the most recent records, the total number of stores now stands at 4,233 across 10 states. We plan to add a total of 600 new stores in fiscal 2024. MedPlus branded products are available in every state and gaining popularity. We aim to achieve a 20% private label share in pharmaceutical sales.
Medplus derives most of its revenue from retail (99.32%), the remainder from domestic sources (0.67%), and operates only in India. As of December 2023 quarter, promoter shareholding is 40.45% and collateral is 58.05%.
The operating revenue of the company was Rs. 4,557.57 crore in FY23 compared to Rs. It increased by 20.59% to ₹3,779.27 crore in fiscal 2022. Net profit recorded 160 million won. 50.10 crore in FY23 compared to Rs. It declined by 47.09% to Rs 94.71 crore in FY22. Employee costs increased slightly relative to sales.
High Promoter Pledge #5 Stock: Thyrocare Technologies
Thyroid Management TechniquesFounded in 1996 by Dr. A. Velumani, is a diagnostic and research company with a diagnostic testing services division that conducts medical investigations into metabolic irregularities, thyroid disorders, diabetes, infertility, anemia, autoimmune diseases and infectious diseases. .
The Diagnostic Testing Services segment primarily contributes majority of the company’s revenue. Additionally, the company’s Imaging Services division manages a network of imaging centers focused on detecting and tracking cancer at an early stage. Thyrocare Technologies Ltd relies heavily on its revenue from its Diagnostic Testing Services segment.
In recent records, Thyrocare has acquired Think Health to strengthen its insurance segment services by providing ECG and blood tests at home. This will provide insurance partners with an all-in-one solution. Capital expenditure for the fourth quarter of FY24 is estimated at INR 5 crores. The capex in FY25 is expected to be around INR 30 crores.
Despite the weak season in the third quarter, EBITDA margins are expected to remain between 29% and 30%. We expect the fourth quarter to be within guidance for the full year. The setup of the laboratory in Tanzania is progressing well and operations are expected to begin in the fourth quarter of FY24. Following the stabilization of operations in Tanzania, further expansion in Africa is also planned.
In FY23, Thyrocare’s revenue was primarily derived from diagnostic testing services (91.37%), imaging services (7.63%), with the remaining 1% coming from other sources. As of December 2023, the promoter shareholding ratio is 71.11%, and 100% of the shares are pledged.
The operating revenue of the company was Rs. 526.67 crore in FY23 compared to Rs 588.86 crore in FY22, a decrease of 10.56%. Net profit recorded 160 million won. 64.36 crore in FY23 compared to Rs. It declined by 63.46% to ₹176.14 crore in FY22. Net profit was significantly impacted by higher material, employee and manufacturing costs in FY23.
Partial List of High Promoter Pledge Stocks
Here we take a look at some stocks with high promoter commitments.
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conclusion
Towards the end of the article, we examined some companies with high promoter commitments. The higher the collateral ratio, the more important the promoter’s stake becomes. Several factors can affect various aspects of a business, including the management choices of management as well as the level of financial investment by the company’s promoters.
It is important how much voting rights the promoters have on the company’s decisions. What do you think about the company’s potential? Let us know your thoughts in the comments section below.
Written by Santosh
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