Why do promoters pledge share ?

#1
Why do owners pledge their share ?
In this case doesnt it appear that , wife of Uma Shankar ji pledge shares from her own account after transferring it from her husband or something similar .
Anyway why do they pledge shares ? What impact does it have to business ?
 

columbus

Well-Known Member
#2
Why do owners pledge their share ?
In this case doesnt it appear that , wife of Uma Shankar ji pledge shares from her own account after transferring it from her husband or something similar .
Anyway why do they pledge shares ? What impact does it have to business ?
Promoters can pledge shares to a BANK.
In exchange they will get bank loan.
 

PGDIMES

Well-Known Member
#3
Why do owners pledge their share ?
In this case doesnt it appear that , wife of Uma Shankar ji pledge shares from her own account after transferring it from her husband or something similar .
Anyway why do they pledge shares ? What impact does it have to business ?
All types of markets work on leverage... and all financial crises are the effects of the extreme leverage...
 
#4
PGDIMES : nice one ! Yes I believe the same too ...columbus , fine also why do they have to do that ? I mean isnt it a double edged weapon ?

Like if the company does well - you have got a bank loan at low interest and evyerthing worked well
If the company has performed badly , the share value goes down and repayment becomes difficult
 

columbus

Well-Known Member
#5
PGDIMES : nice one ! Yes I believe the same too ...columbus , fine also why do they have to do that ? I mean isnt it a double edged weapon ?

Like if the company does well - you have got a bank loan at low interest and evyerthing worked well
If the company has performed badly , the share value goes down and repayment becomes difficult
Hi nishant,

In world ,everybody is opportunist.With each fresh LOAN everybody thinks
to turn around a company ,which earlier loans did not.