Share Pledge is the practice where shareholders use their shares as collateral to borrow money from lenders.
In a Share Pledge, investors or promoters pledge their shares to banks or financial institutions to secure loans. The ownership remains with the shareholder, but the lender has rights over the shares until the loan is repaid.
Such practices are monitored under regulations by the Securities and Exchange Board of India.
👉 High promoter pledge is often seen as a risk indicator
"A promoter pledges 50% of their shares to get a loan. If the share price drops, the lender may sell those shares."