As Investopedia defines it:

A promoter is an individual or company that, for a fee, helps raise money for some type of investment activity. Most often, promoters raise money for a company through offering investment vehicles other than traditional stocks and bonds, such as limited partnerships and direct investment activities. Often times, these promoters are paid in company stock or free entrance into the investment activity as compensation for their work in raising funds from others.

What does a high/low promoter's share indicate about the company? Also,What is share pledging?

  • $\begingroup$ Hi Rashid, welcome to Quant.SE! I think your talking about NPS like metrics which are not quantitative finance so I'll close this question. $\endgroup$ – Bob Jansen Apr 12 '16 at 17:00
  • $\begingroup$ I'm voting to close this question as off-topic because it's not about quantitative finance. $\endgroup$ – Bob Jansen Apr 12 '16 at 17:00
  • $\begingroup$ my bad, didn't know this concept $\endgroup$ – Bob Jansen Apr 12 '16 at 17:15
  • $\begingroup$ @BobJansen even I felt this is off-topic..but couldn't think of any other "finance" related portal..can you suggest one? $\endgroup$ – dsfads Apr 12 '16 at 17:36
  • $\begingroup$ I reopened because I think it could be on-topic. Can you please define or link to a definition of promoter share? $\endgroup$ – Bob Jansen Apr 12 '16 at 17:37

high Promoter share in a company has the following advantages.

  1. Stock price is usually higher as the availability in open market is low.
  2. High probability of the company being strong. Cause, they needn't depend on votes to take right decisions. But it could backfire too.

Low promoter share in a company means,

  1. The volatility is predictable to a greater extent.
  2. Decision making is often slow, but need not be true in all cases. If Steve Jobs is running the company, he wouldn't face issues with Voting :)
  3. PE ratio of the company would often be low.

I hope i have answered your question.


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