SAST Disclosure query – Pledge of shares by non-promoter shareholder (Reg 29 vs Reg 31)

[riya jain]

Seeking views from the group on the following:

A non-promoter shareholder holding approx. 9.05% of paid-up capital in a listed entity is pledging shares to an NBFC lender as security for a loan. The shares being pledged work out to approx. 4.05% of the company's total paid-up share capital.

Since the shareholder is not a promoter, my understanding is that Regulation 31 (which is promoter-specific) does not apply. However, since the pledge is treated as a "disposal" under Regulation 29, and the change (~4.05%) exceeds the 2% threshold, a disclosure under Regulation 29(2) should be triggered to the company/stock exchanges within 2 trading days.

Would appreciate the group's confirmation on:

1. Whether Regulation 29(2) disclosure is indeed the correct route here (as opposed to Regulation 31 or any other applicable provision).