Midcap shares slump on talk of sale of pledged shares

[Rajesh Desai]

Reuters) - Mid- and small-sized stocks slumped on Monday, with welded steel pipe maker Welspun Corp Ltd (WGSR.NS) falling as much as 28 percent, on speculation that the pledged shares of these companies were being sold off, dealers said.

Controlling stakeholders of Indian companies often receive loans from financial institutions, pledging their shares as collateral, making these stocks vulnerable to any rumours of liquidations.

Welspun was down 30 percent as of 12:43 p.m. Shipbuilder ABG Shipyard Ltd (ABGS.NS) and Aanjaneya Lifecare Ltd (AANJ.NS) fell by their daily limit of 20 percent.

(Reporting by Abhishek Vishnoi and Manoj Dharra; Writing by Rafael Nam; Editing by Prateek Chatterjee)

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CA. Rajesh Desai