In the case of Share Pledge Trustee, the shares pledged can either be offered as 100% security under the transaction or may be partial or as collateral, as lenders follow their method of advancing under pledge transactions. Normally adequate margin is kept against the market value of shares offered under the pledge. Margin adequacy depends upon the volatility of pledged shares and/or market conditions.
Scope of Services
- Pledge of shares is held by us for the benefit of the lender for the entire tenor of the transaction.
- Valuation of shares is continuously monitored by us for the listed shares pledged on a daily, weekly & monthly basis. Daily reports are generated & sent to the relevant lenders along with the requirement of the margins.
- In case of Event of Default, we can invoke the pledge on the basis of instructions received from the lender and as per Regulatory provisions and Guidelines from time to time.
In cases where defaults are triggered by us on behalf of the Lender(s), shares may be sold by us on behalf of the lender(s) through various broking entities that we may choose to appoint.
- In consortium lending where a number of lenders are involved, it is always beneficial to have a pledge of shares with a single entity i.e. with the Trustee, instead of having a pledge of shares in favor of each individual lender. In such a case, we will hold the pledge for the benefit of consortium lenders.
