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

A company's promoters hold 60% of its equity, and 40% of the promoter holding is pledged with lenders. Total shares outstanding are 10 crore. The share price falls sharply and lenders invoke the pledge on half of the pledged shares, selling them in the market. What is the promoters' shareholding percentage after the sale, assuming no other change in the share count?

Promoters hold 6 crore shares, of which 2.4 crore are pledged. Lenders sell half the pledged shares, which is 1.2 crore, leaving 4.8 crore shares out of 10 crore. The promoters' shareholding therefore falls to 48 percent.

  1. A52%Correct
  2. B54%
  3. C48%
  4. D56%

Explanation

Promoter shares = 60% of 10 crore = 6 crore. Pledged = 40% of 6 crore = 2.4 crore. Half invoked = 1.2 crore. Remaining = 6 - 1.2 = 4.8 crore, which is 4.8/10 = 48%. Check: 60% minus 12% of total shares is 48%. The 52% option wrongly subtracts only 8 points, and 54% and 56% understate the loss further.

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