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NISM Certifications · NISM-Series-XV: Research Analyst · Company Analysis - Business and Governance

A company's promoters held 60 million of 100 million shares. Of these, 24 million shares are pledged with lenders. The share price falls sharply and lenders invoke the pledge on one-half of the pledged shares. What will be the promoter holding percentage after the invocation, assuming no other change in share count?

Promoter holding falls to 48 percent. Lenders invoke half of the 24 million pledged shares, which is 12 million, so promoters are left with 48 million of 100 million shares. Invocation transfers shares away from promoters and reduces their stake and control.

  1. A48%Correct
  2. B36%
  3. C54%
  4. D60%

Explanation

Pledged shares invoked = 24/2 = 12 million. Promoter holding falls to 60 - 12 = 48 million of 100 million, which is 48%. The 36% option wrongly removes all 24 million; 54% removes only 6 million; 60% ignores the invocation.

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