XTRAS: In 2008, Tata Motors issued DVR shares for raising funds for acquisition of Jaguar Land Rover. It was the first company in India to issue it and amongst the very few in Asia.
Decoding DVR Shares and the Hype about it
The first-ever DVR shares issued in India were by Tata Motors in 2008. Later on other companies like Future Enterprises and Jain Irrigation, Gujarat NRE Coke and so on followed. But the magnetism of DVRs was momentary. Fast forward today, for quite some time now DVR shares have again gained some traction and here is why. Keep reading further to know more about DVRs!
So, what are DVRs?
DVR stands for Differential Voting Rights. These are the shares of a company but with fewer voting rights to the shareholder. The main difference between ordinary shares and DVRs is that the latter has lesser voting rights. With DVR shares, one can have even less than one vote per share. Also, to make up for the loss of the votes, companies give a higher dividend on DVR shares as an added bonus.
Speaking of the majority, many people do not even bother about exercising their voting rights. So with DVR, you can actually exchange something that you don’t even want (voting rights) within something you want (higher dividend).
