The Securities and Exchange Board of India (Sebi) is set to make it mandatory for promoters to report to stock exchanges, if they pledge their shares to raise funds.
At the primary market advisory committee meeting held on Monday, there was a consensus that irrespective of the quantity of the shares pledged, the promoter group has to disclose the details to shareholders and stock exchanges.
"When the promoter has exhausted all other sources to raise funds, he pledges his holding in the company as a last resort, which is a clear indication that it is not an ideal situation," said an official who was present at the meeting.
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