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- Title
PROMOTERS' EQUITY SHARE PLEDGING, FINANCIAL PERFORMANCE AND FINANCIAL DISTRESS: A CASE STUDY OF FUTURE GROUP COMPANIES LISTED ON NATIONAL STOCK EXCHANGE OF INDIA.
- Authors
MEHTHA, S. RAMESHKUMAR; BHILARE, MEGHANA; MEHTHA, VIJAYSHRI
- Abstract
This research paper emphasizes on Promoters' Equity Shareholding pledging and its relationship with Financial Distress and Financial performance. Today many Companies (listed on Indian Stock Exchange promoters) are pledging their Equity shares for various purposes. In this study we have selected six group companies of the Renowned and well-known corporate house namely Future Group which are listed on National Stock Exchange. The promoters of this companies have off late ledged their equity shares with Financial Intuitions. Financial distress is a condition in which a company or individual cannot generate sufficient revenues or income, making it unable to meet or pay its financial obligations. The main aim of the research undertaken is to find out whether company is in Financial Distress using 10 years data for the company Future Group. Data collected on various financial parameters from the year 2010 till 2021. The method used is a case study method with specific company only. The research also tries to find Before and After pledge financial performance and Financial Solvency position using Altman Z Score Model. For Analyzing the Before and After Promoters' Equity Share Pledging on the Financial Performance of the company Independent Sample T Test was Carried out on the Data. Proxy for the financial performance were Earnings per Share, Net profit Margin, Debt Equity Ratio, Current Ratio, Return on Assets and Assets Turnover Ratio. The current study used financial performance indicators viz Net Sales, Total Assets, Retained Earnings, Working Capital etc. The Altman Z score is used for analyzing the data and interpret the financial distress of the company. Financial statement analysis and various financial ratios are used for analysis. The research is based on secondary data and data is mainly collected from Bombay Stock Exchange website and annual reports published. The Research findings were that in the year 2020-2021, five of the Six Group companies were in financial Distress. Other findings were post ledge Asset Turnover Ratio, Earnings per share, Net profit margin, Return on Assets and Assets Turnover Ratio have declined.
- Subjects
FINANCIAL performance; STOCK exchanges; RATIO analysis; CORPORATION reports; NATIONAL Stock Exchange of India Ltd.; ECONOMIC indicators; DISTRESSED securities; EARNINGS per share
- Publication
CLEAR International Journal of Research in Commerce & Management, 2021, Vol 12, Issue 9, p1
- ISSN
2249-4561
- Publication type
Article