Max Financial has clarified that the share sale by Nippon India Mutual Fund (MF) was not related to invocation of pledged shares, but part of the fund house’s investments.

On Thursday, the insurer informed the exchanges that Nippon India MF had sold 289,200 shares of the company in open market on Tuesday. This disclosure, which was made as part of substantial acquisition of shares and takeovers regulations, led to speculation whether the sale was on account of invoking of pledged shares.

The company later said, “We have been approached by investors on 2.89 lakh equity shares of the company sold by Nippon Life India Asset Management seeking clarification if such shares sold by Nippon Life is invocation of pledge on loans taken by promoters.”

The company said that its promoters had no debt exposure to Nippon India MF.

After the share sale, Nippon India MF’s stake in Max Financial came down to 3.44 per cent from 3.55 per cent.

According to data from the exchanges, 94.76 per cent of promoters’ shares of Max Financial is pledged.

The value of these holdings is at Rs 3,334.16 crore at current market price. However, this doesn’t factor any changes in promoter pledging since March quarter shareholding disclosures.