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Stuck in the muck

Some companies face the dual challenge of falling earnings and debts to service on pledged equity

Six companies that have pledged a significant proportion of their equity but are witnessing a continuous fall in their earnings

There are currently 842 listed companies where promoters have pledged at least some amount of their shares. The system works fine if the company's earnings are maintained but a deterioration of earnings can lead to a fall in its share price and hence, trigger a sell-off which further reduces the price - creating a cycle. We have compiled a list of companies which have pledged at least 20 per cent of their total shares and have also witnessed their earnings deteriorate continuously over the past four quarters.