{"id":5784,"date":"2024-07-26T10:30:04","date_gmt":"2024-07-26T05:00:04","guid":{"rendered":"https:\/\/uat1.gettogetherfinance.com\/blog\/?p=5784"},"modified":"2025-10-10T17:01:01","modified_gmt":"2025-10-10T11:31:01","slug":"pledging-of-shares","status":"publish","type":"post","link":"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/","title":{"rendered":"Pledging of Shares"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-content\/uploads\/2024\/07\/pledging-of-shares-1-1024x597.webp\" alt=\"pledging of shares\" class=\"wp-image-5794\"\/><\/figure>\n\n\n\n<p>Pledging of shares is one of the common practices in share market which means that an individual is using their shares as collateral in order to raise funds or secure loans. Promoters as well as individuals pledge their shares to raise funds and meet their financial requirements. The blog will guide you about the complete practice of pledging shares with its pros and cons.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_73 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#What_is_Pledging_of_Shares\" title=\"What is Pledging of Shares?\">What is Pledging of Shares?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#How_does_Pledging_Works\" title=\"How does Pledging Works?\">How does Pledging Works?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#What_is_Pledging_of_Promoters_Shares\" title=\"What is Pledging of Promoters Shares?\">What is Pledging of Promoters Shares?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#Reasons_to_Pledge_Shares\" title=\"Reasons to Pledge Shares\">Reasons to Pledge Shares<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#Corporate_Financing\" title=\"Corporate Financing\">Corporate Financing<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#Debt\" title=\"Debt\">Debt<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#Margin_Trading\" title=\"Margin Trading\">Margin Trading<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#Strategic_Investments\" title=\"Strategic Investments\">Strategic Investments<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#Benefits_of_Pledging_of_Shares\" title=\"Benefits of Pledging of Shares\">Benefits of Pledging of Shares<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#Capital_Access\" title=\"Capital Access\">Capital Access<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#Retention_of_Ownership\" title=\"Retention of Ownership\">Retention of Ownership<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#Reduced_Interest_Rates\" title=\"Reduced Interest Rates\">Reduced Interest Rates<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#Enhanced_Liquidity\" title=\"Enhanced Liquidity\">Enhanced Liquidity<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#Investment_Leverage\" title=\"Investment Leverage\">Investment Leverage<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#Risks_of_Pledging_Shares\" title=\"Risks of Pledging Shares\">Risks of Pledging Shares<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#Market_Volatility\" title=\"Market Volatility\">Market Volatility<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#Interest_Costs\" title=\"Interest Costs\">Interest Costs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#Complexity_and_Legal_Risks\" title=\"Complexity and Legal Risks\">Complexity and Legal Risks<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#Final_Thoughts\" title=\"Final Thoughts\">Final Thoughts<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#FAQs\" title=\"FAQs\">FAQs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#u003cstrongu003eWhat_is_Pledging_of_Sharesu003cstrongu003e\" title=\"u003cstrongu003eWhat is Pledging of Shares?u003c\/strongu003e\">u003cstrongu003eWhat is Pledging of Shares?u003c\/strongu003e<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#u003cstrongu003eHow_to_pledge_sharesu003cstrongu003e\" title=\"u003cstrongu003eHow to pledge shares?u003c\/strongu003e\">u003cstrongu003eHow to pledge shares?u003c\/strongu003e<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#u003cstrongu003eWhat_is_unpledging_of_sharesu003cstrongu003e\" title=\"u003cstrongu003eWhat is unpledging of shares?u003c\/strongu003e\">u003cstrongu003eWhat is unpledging of shares?u003c\/strongu003e<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/pledging-of-shares\/#u003cstrongu003eIs_pledging_of_shares_goodu003cstrongu003e\" title=\"u003cstrongu003eIs pledging of shares good?u003c\/strongu003e\">u003cstrongu003eIs pledging of shares good?u003c\/strongu003e<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Pledging_of_Shares\"><\/span>What is Pledging of Shares?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-content\/uploads\/2024\/07\/what-is-pledging-of-shares-1024x276.webp\" alt=\"What is Pledging of Shares?\" class=\"wp-image-5787\"\/><\/figure>\n\n\n\n<p>In simple terms, pledging is to take loans against the securities you own and in this case, these securities are the shares held in your account.<\/p>\n\n\n\n<p>Still complicated? Let us simplify the meaning of pledging.<\/p>\n\n\n\n<p>Suppose you are in need to raise funds in order to meet the working capital requirements, as an investment strategy or to meet the financial requirements. Here, pledging comes into the picture which determines that you can keep your existing shares as collateral security with the broker without changing their ownership and gain margin funds in return. Therefore, if you pledge your shares that means you are taking a loan against the shares in possession.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_does_Pledging_Works\"><\/span>How does Pledging Works?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-content\/uploads\/2024\/07\/How-does-Pledging-Works-1024x276.webp\" alt=\"How does Pledging Works?\" class=\"wp-image-5788\"\/><\/figure>\n\n\n\n<p>When you take a loan from a bank, you are supposed to mortgage an asset as a security. Similarly when you take margin amount from the broker (lender), you are required to mortgage or pledge the shares as a collateral security and similarly pay the required interest on the margin amount. When shares are pledged, ownership remains with the investor only until the investor fails to repay the loan which gives an authority to the lender to sell the pledged shares and recover the amount else, the investors repays the amount and releases the pledged shares.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Pledging_of_Promoters_Shares\"><\/span>What is Pledging of Promoters Shares?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Promoters represent an entity of the firm who held the majority stakes of the company in its initial stages. Promoters participate in regular affairs of the business and are responsible for its regular operations. So when an entity is in need of funds for regular operations or expansion of the business, it can be done through equity, issuing corporate bonds, etc. While raising funds from pledging promoters shares, their shares are kept as collateral security for the loan by lenders.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Reasons_to_Pledge_Shares\"><\/span>Reasons to Pledge Shares<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-content\/uploads\/2024\/07\/Reasons-to-Pledge-Shares-1024x276.webp\" alt=\"Reasons to Pledge Shares\" class=\"wp-image-5789\"\/><\/figure>\n\n\n\n<p>Typically, shares are pledged by the investors or promoters to meet the financial obligations and secure financing but let us talk in depth why an individual or a company requires pledging their shares.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Corporate_Financing\"><\/span>Corporate Financing<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Funds are required to expand the business activities, mergers, acquisitions and other regular operations of corporate activities. To finance the business operations, a company or its promoters might pledge their shares to obtain necessary funds.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Debt\"><\/span>Debt<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>During times of financial difficulties, investors might pledge their shares as a part of a debt restructuring agreement where they can assure the lender of their commitment to repay the debt.<\/p>\n\n\n\n<p><strong>Also Read<\/strong>: <a href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/debt-equity-swap\/\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/uat1.gettogetherfinance.com\/blog\/debt-equity-swap\/<\/a><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Margin_Trading\"><\/span>Margin Trading<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In <a href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/zerodha-margin-calculator\/\" target=\"_blank\" rel=\"noreferrer noopener\">margin trading<\/a>, traders pledge their shares to buy more shares which is not possible for them with available funds. If the value of pledged shares falls, a margin call is issued by the broker to deposit the funds or sell a portion of the pledged shares.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Strategic_Investments\"><\/span>Strategic Investments<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Investors make <a href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/buy-and-hold-investment-strategy\/\" target=\"_blank\" rel=\"noreferrer noopener\">strategic investments<\/a> by pledging their shares as a partnership agreement where shares are pledged by one party as a commitment or the security of performance obligations.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Benefits_of_Pledging_of_Shares\"><\/span>Benefits of Pledging of Shares<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-content\/uploads\/2024\/07\/Benefits-of-Pledging-of-Shares-1024x276.webp\" alt=\"Benefits of Pledging of Shares\" class=\"wp-image-5790\"\/><\/figure>\n\n\n\n<p>In terms of financial flexibility and capital, there are several advantages of pledging the shares, read below to gain an in depth understanding about the pros of pledging of shares:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Capital_Access\"><\/span>Capital Access<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Pledging of shares is very useful for individuals to have access to capital instead of selling their equity holdings. This allows investors to gain more profits by having extra funds from the lender as it helps in financing business operations, expansions as well as personal financial needs.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Retention_of_Ownership\"><\/span>Retention of Ownership<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Investors do not lose the ownership when they pledge their shares. They can get more funds by pledging them instead of selling the shares and enjoy the benefit from potential appreciation in the share value and dividends.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Reduced_Interest_Rates\"><\/span>Reduced Interest Rates<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Pledged shares are in the form of security to the lender; hence the interest rate is lower as compared to unsecured loans.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Enhanced_Liquidity\"><\/span>Enhanced Liquidity<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Pledging of shares allows investors to convert non-liquid assets or shares into liquid assets or cash which is crucial to meet immediate financial needs or obligations.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Investment_Leverage\"><\/span>Investment Leverage<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Pledged shares are used by investors to obtain margin loans to leverage their investment portfolio and buy more shares. It possesses significant risks but can enhance the potential in the overall portfolio of an investor.<\/p>\n\n\n\n<p><strong>Also Read<\/strong>: <a href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/ltp\/\" target=\"_blank\" rel=\"noreferrer noopener\">LTP<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Risks_of_Pledging_Shares\"><\/span>Risks of Pledging Shares<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-content\/uploads\/2024\/07\/Risks-of-Pledging-Shares-1024x276.webp\" alt=\"Risks of Pledging Shares\" class=\"wp-image-5791\"\/><\/figure>\n\n\n\n<p>Pledging of shares is nowhere bad until it is executed intellectually with smart moves as well as considering the risk factors.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Market_Volatility\"><\/span>Market Volatility<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Due to <a href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/stock-market-volatility\/\" target=\"_blank\" rel=\"noreferrer noopener\">fluctuating market conditions<\/a>, the value of pledged shares can even fluctuate and fall significantly which might require the borrower to provide additional collateral or repay a part of the loan. Inability to repay the loan can lead to the forced sale of shares.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Interest_Costs\"><\/span>Interest Costs<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Borrowers are obliged to pay interest rates to avail the loans secured by pledged shares and the investors might have to bear financial losses if interest costs are higher than the returns on investments.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Complexity_and_Legal_Risks\"><\/span>Complexity and Legal Risks<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Pledging of shares involves a lot of complexity with the complications of legal agreements and documentation. Due to the complexity involved, misinterpretations happen which can lead to legal disputes as well as financial losses.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Final_Thoughts\"><\/span>Final Thoughts<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Pledging of shares is a great practice which allows investors to take loan from the lender by keeping shares as a collateral security. Investors can use brokers like <a href=\"https:\/\/dhan.co\/\" target=\"_blank\" rel=\"noreferrer noopener\">Dhan <\/a>and <a href=\"https:\/\/www.sharekhan.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">Sharekhan <\/a>to pledge their shares successfully as they are quite efficient to use.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span>FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-question-1721910355169\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"u003cstrongu003eWhat_is_Pledging_of_Sharesu003cstrongu003e\"><\/span>u003cstrongu003eWhat is Pledging of Shares?u003c\/strongu003e <span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Pledging of shares is a common practice used by investors to gain extra funds from the broker as a loan using the existing holding of shares as collateral. <\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1721910370760\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"u003cstrongu003eHow_to_pledge_sharesu003cstrongu003e\"><\/span>u003cstrongu003eHow to pledge shares?u003c\/strongu003e <span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>To pledge the shares, an individual needs to have a DEMAT account, sign the pledge agreement and transfer the shares to the lender. After the transfer of shares, the lenders have the right to sell the pledged share if the borrower defaults. <\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1721910382165\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"u003cstrongu003eWhat_is_unpledging_of_sharesu003cstrongu003e\"><\/span>u003cstrongu003eWhat is unpledging of shares?u003c\/strongu003e <span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>When the lender releases the pledged shares after the loan payment is done, the shares are unpledged i.e. the shares are transferred back in the demat account of the borrower. <\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1721910392896\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"u003cstrongu003eIs_pledging_of_shares_goodu003cstrongu003e\"><\/span>u003cstrongu003eIs pledging of shares good?u003c\/strongu003e <span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Pledging of shares is beneficial and an effective method of raising capital without any dilution of equity, however an individual must be aware of the consequences in case of inability to repay the loan. <\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>Pledging of shares is one of the common practices in share market which means that an individual is using their shares as collateral in order to raise funds or secure&#8230;<\/p>\n","protected":false},"author":6,"featured_media":5796,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[62],"tags":[],"class_list":["post-5784","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock-market"],"acf":[],"_links":{"self":[{"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/posts\/5784","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/comments?post=5784"}],"version-history":[{"count":7,"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/posts\/5784\/revisions"}],"predecessor-version":[{"id":7787,"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/posts\/5784\/revisions\/7787"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/media\/5796"}],"wp:attachment":[{"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/media?parent=5784"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/categories?post=5784"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/tags?post=5784"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}