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ARTICLE · 15 OCTOBER 2019

IS INDIA READY FOR DVRS?

Shardul Amarchand Mangaldas & Co
Shardul Amarchand Mangaldas & Co
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Time and event based "sunset" clauses have also been notified by SEBI, which trigger mandatory conversion of SR Shares to ordinary equity shares.

IndiaCorporate/Commercial Law
Arvind Sharma
Arvind Sharma
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SEBI's recent framework for issuance of shares having superior Differential Voting Rights ("DVRs") has fuelled the historical debate on differential voting rights and created ripples Dalal Street and the promoter community.

Shares having DVRs, operate against the traditional "one-share, one-vote" norm, thereby, providing shareholders with voting rights that are disproportionate to their economic ownership. While prevalent in developed capital markets such as the U.S.A., Hong Kong and Singapore, "dual-class capital structures" have had a limited presence in India. Prior to the recent amendments notified by SEBI, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 included enabling provisions for listed companies to issue DVRs, albeit with inferior voting rights. However, DVR structures with inferior voting rights have hitherto met with a tepid response by India Inc., with only handful of listed companies such

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