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DVR stands for Differential Voting Rights. DVR shares are similar to ordinary equity shares, but they provide fewer voting rights for shareholders. DVR shares have the option of having a greater or lower voting rights than ordinary equity shares. Indian regulations prohibit companies from issuing equity shares with higher voting rights. DVR shares have lower voting rights than ordinary shares.
DVR shares are different from Ordinary shares in that they have voting rights. Also, DVR shares receive higher dividend.
These shares can be traded on stock exchanges in the same way as ordinary shares. However, DVR shares are typically traded at a discount.
Among the Indian companies that have issued shares with differential voting rights are Pantaloon retail and Tata Motors.
There are currently very few DVR shares-eligible companies. Let's now look at the benefits of DVR shares.
DVR shares provide a different option for both investors. Retail investor and institutional investor, especially those who aren't certain about voting rights, may see economic value in the form of high-discount offer. DVR shareholders receive incremental dividends.
DVR shares can be a good investment for long-term investors. They are especially useful for investors who do not want to vote but are interested in higher dividends. DVR shares can be listed just like ordinary shares. DVR shares can be traded at a discount because they provide limited voting rights to shareholders. Investors can benefit from the price differentiation between DVR shares, normal shares, and DVR shares.
DVR shares are a great investment tool. It is an excellent way to increase dividends for retail investors who are not able to vote at AGMs. You can get a DVR at a significant discount. DVR shares in India have yet to take off in a significant way.