InvestorQ : What is a DVR share and how come they give good dividends?
Ankit Patil made post

What is a DVR share and how come they give good dividends?

9 months ago

The best companies which give DVR shares are:

  • Tata Motors,
  • Future Retail group
  • Gujarat NRE Coke
  • Jain Irrigation

Ankit Patil answered.
9 months ago
DVR stands for Differential Voting Rights. It is like any other ordinary equity share which provides fewer voting rights to the shareholders. As compared to ordinary equity shares, DVRs can have higher or lower voting rights. However, Indian companies cannot issue equity shares with higher voting rights, so there can be only lower voting rights on DVRs.

DVRs are generally issued at discount and offer higher dividends, and in turn, they are provided with lower voting rights. So, in practice, the higher dividend is to compensate for the lower voting rights. Currently, there are very few companies in India that issue DVRs.

They have the following advantage:

  1. The company can decide on how much of its powers to dilute and can retain control and raise money.
  2. The company can choose how many voting rights to be given to shareholders and what kind of shares should it issue.

So, these are generally suitable for investors who are not much concerned about the voting and rather focuses on the economic value of the shares.