List of companies where more than 25% of promoter holding is pledged can be found here.

A run on these could trigger a sell-off if promoters cannot maintain margins. Anyone holding these shares should be on the alert.

What exactly does this mean - "holding is pledged"?

Pledged to whom? Why?

Promoters hold shares in the company. The value of these shares represent an asset for them. This asset can be kept as collateral for obtaining loans. Just as you can get loan giving gold or land as collateral.

Promoters have borrowed money against these shares.

If a stock is used as a collateral and its price falls, the lender asks the borrower to provide more shares or cash as margin. If the promoter is unable to provide more shares or cash, the lender may recover his money by selling the shares in the open market.

Investors should be alert in cases where more than two-thirds of the promoters' shares are pledged.

In cases where only 25%-30% of the promoters' shares are pledged, promoters can temporary pledge more shares to avoid liquidation of their holdings by the lenders.

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I am holding Skumars at 88.00, now it has halved. The fall was due to the promoters' pledged shares getting sold but does this mean that something is wrong with the company as well?

I can understand that promoters pledging such a huge amount is not good, but is the shares being bought by normal people also bad?

I don't plan to sell now, I can hold, and I am thinking of averaging, but I am not sure at what level to average. Can anyone give previous examples of stocks where pledged shares were sold - did they recover or did they fall even more?

S. Kumars has denied that any of the promoters' pledged shares were sold.

I am not sure about the technicals or fundamentals of the company and so won't give any levels for now. Maybe later.

When a stock falls sharply with high volumes, a lot of people buy at each level and get "trapped".

Every time the stock tries to recover, these people sell the stock and create stiff resistance at each levels.

Technically, a minor bounce is possible in such a stock, but there is little chance of a full V-shaped recovery.

Only if fundamentals of the company are strong, a significant recovery is possible.

Otherwise, the stock will continue remain at lower levels.

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S Kumars average volume is between 15 and 25 lac shares, while on the 21st it was 2 crores, and today it was 1 crore.

S Kumars had informed on the 17th that Morgan Stanley was going to sell 6 lac shares, which it did on the 21st:

http://www.moneycontrol.com/livefeed...20611_SAST.pdf

I'm not sure if 6 lac shares can bring down the stock this much, but it looks like the seller just let it go at market price, which isn't something an investor who bought at lower levels would do.

Or is it possible that operators who already knew this sale was going to happen also short-sold heavily on the same day so that they could cover at the lower levels?

Sellers don't disclose their trades in advance.

The intimation is done after the sale.

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An additional list of companies where considerable promoter shares are pledged [link].

Being in the list itself doesn't mean anything, but people owning them should be watchful of future developments.

Moneycontrol has published a consolidated list of companies with pledged promoter shares. See this link.

Being in the list itself doesn't mean anything; but given that the market is consistently dropping, it is advisable to be extra cautious of these stocks.

I was under the impression that Tata Coffee is a strong company. Has all of its 57% holding pledged!

Pledgeing of shares by promoters is not necessarily a reflection on the quality of the stock.

Promoters of Tata Coffee may have pledged their shares to raise money for use in other endeavours.

It does however reflect a risk to the share price of the company. Please see comments by Alchemist earlier in the thread.