What is a DVR share?
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A DVR share is a type of equity share that offers limited voting rights. You become a stakeholder in the company but don't get the same say in decisions as ordinary shareholders.
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DVR Share stands for share with Differential Voting Rights. These shares allow a company to raise funds without giving the same voting rights to all shareholders. So, what is DVR Share in simple terms? It’s a type of equity share that gives lower voting power compared to regular equity shares, while still offering the same economic rights, like dividends.
Indian companies can issue DVR shares under the Companies Act, 2013, and as per rules set by SEBI. However, in India, DVR shares cannot carry superior voting rights when offered to the public. Only shares with limited or lower voting rights are allowed.
DVR shares help promoters retain control of the company, even while raising capital. For you as an investor, this means owning part of a company, but with fewer rights to vote on key matters. Still, you receive dividends and participate in the company’s growth, just like with ordinary shares.
DVR shares are like regular equity shares in most ways. You still own part of the company. You can still get dividends. You just have limited voting power compared to someone with ordinary shares.
Each company decides how many DVR shares it wants to issue, but by law, these can’t go over 25% of the total share capital. So, if you're buying shares in the stock market, and they’re labelled as DVR shares, know that your voice in company matters might be smaller. But your rights as a stakeholder still stand.
Why do companies issue DVR shares? Mainly to raise capital without losing too much control. It also helps them attract investors who want to earn from the business without getting into boardroom decisions.
For you, DVR shares can be a way to invest in a company without worrying too much about voting rights—especially if your focus is more on long-term ownership than daily management choices.
Here’s a quick breakdown of how DVR shares and ordinary shares differ:
Parameters | DVR Shares | Ordinary Shares |
Voting Rights | Limited or reduced voting rights | One share equals one vote |
Rate of Dividend | Can be higher or lower than regular shares | Usually fixed per class of equity shareholders |
Suitability | Works well for small investors and promoters | More common among large stakeholders |
Issuance Price | Often issued at a discount | Generally issued at fair market value (FMV) |
Each share type serves a purpose. DVR shares might suit you if you're investing passively. If you're looking to take part in key decisions, ordinary equity shares could make more sense.
Lower cost to invest: DVR shares often trade at a discount. That means you can buy into a company without spending as much as you would on regular equity shares.
Good for passive investors: If you're not too interested in voting on company matters, DVR shares might be a simpler choice.
Possible higher dividends: Some companies offer slightly better dividends on DVR shares to balance out the lower voting rights.
Fewer voting rights: You won’t have much say in how the company is run. If that matters to you, DVR shares might not be ideal.
Lower liquidity: Fewer people buy and sell DVR shares. This can make it harder to exit your position when you want to.
Risk of misuse: Because control stays with the promoters, there's a chance they might make decisions that don’t always benefit smaller stakeholders.
The regulatory rules for DVR Shares in India are defined by SEBI (Securities and Exchange Board of India) and the Companies Act, 2013. The concept of DVR shares—particularly those with superior voting rights (SVRs)—was formally recognised in July 2019, when SEBI allowed tech-driven companies to issue them under strict conditions.
Initially, only promoters with a net worth of ₹500 crore or less were eligible to issue superior voting rights. However, in 2021, SEBI increased this cap to ₹1,000 crore, allowing more entrepreneurs, especially in the startup ecosystem, to retain control while accessing capital.
SEBI also eased the listing rules. Earlier, companies had to wait six months after issuing DVR shares before filing for an IPO. This cooling-off period was reduced to three months, making it easier for startups to go public without losing momentum.
These updates show SEBI’s effort to support innovation-led businesses while protecting stakeholder interests. As someone considering DVR shares, understanding these rules is key. It helps you assess how voting rights, control, and timing influence your position as a stakeholder in a listed company.
DVR shares offer a different way to be part of a company. You still invest. You still share in its success. But your voting rights are limited. If your goal is long-term growth and not active participation in decisions, DVR shares might align with what you're looking for. Just be aware of the risks—less liquidity, fewer rights, and sometimes less influence.
Like any investment, it's important to match DVR shares with your goals, risk appetite, and knowledge of the market.
Disclaimer: Investments in securities market are subject to market risks. This content is for informational purposes only and does not constitute investment advice.
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A DVR share is a type of equity share that offers limited voting rights. You become a stakeholder in the company but don't get the same say in decisions as ordinary shareholders.
DVR shares have fewer voting rights and may trade at lower prices. Ordinary shares come with full voting power—one share, one vote.
Companies issue DVR shares to raise funds while keeping control. It allows promoters to bring in capital without losing decision-making power.
DVR shares are usually cheaper and can offer higher dividends. They're useful if you're looking to invest passively in a business.
Yes. DVR shares often have lower liquidity and limited voting rights. You may also face challenges if promoters misuse their control powers.
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