When promoters pledge shares, they keep shares as collateral with a financial institution, such as a bank, to raise money.
Pledging is not always bad. Many times promoters pledge their stake for sound business reasons and later release their pledged shares. But pledging takes an ugly turn when the pledged stake is high and the promoter is unable to pay back the dues. This may force the financing institution to sell the pledged stake, which can result in a sudden fall in the stock price and the dilution of promoter stake in the company.
A high pledged stake also indicates a bad management. Investors should stay away from companies that have high levels of pledging.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
