For a sample of share pledges by promoters in India, we examine equity market reactions around pledging event dates. Consistent with market folklore, in the univariate case, we find that markets react negatively to share pledges. However, in a multivariate setting, we find that the markets react positively on average and that the negative reaction is driven by other factors related to the share pledge like promoter characteristics and the stated reason for the pledge. Conversely, we find weak evidence of negative market reaction to the revoking of share pledges. This is contrary to expectations as revoking a pledge is likely to indicate positive information about the promoter’s ability to repay the loan.