Mumbai: Minority shareholder issues seem like gaining traction in company India. Nifty50 firms witnessed a 30% year-on-year decline in institutional shareholder dissent in the course of the first half of FY24’s proxy season, knowledge from market tracker Prime Database revealed.
Cases the place greater than 20% of institutional shareholders voted towards resolutions fell to 44 from 63 the earlier yr.
“That is an encouraging signal because it reveals that firms have began taking cognizance of minority shareholders’ pursuits and are additionally partaking with buyers to grasp their issues previous to proposing resolutions,” mentioned Pranav Haldea, managing director, PRIME Database Group.
Majority of dissenting resolutions had been tied to board adjustments and remuneration. The general variety of proposed resolutions dropped to 12,547 in H1 2023-24 from 13,228 throughout the identical interval a yr in the past.
“Even throughout all firms listed on the Nationwide Inventory Alternate (essential board), the variety of such resolutions the place greater than 20% of institutional shareholders voted towards plateaued at 1,498 (or 17.36% of the resolutions for which voting particulars of institutional shareholders is accessible) within the first half of 2023-24 compared to 1492 (or 16.88% of complete) in the identical interval in 2022-23 (and 1041 (or 15.67% of complete) in 2021-22),” mentioned Haldea.
A notable improve was seen in resolutions totally voted towards by shareholders, rising 13% year-on-year to 85.
Promoter participation remained excessive with voting at practically 95% of their holdings. In distinction, non-institutional public shareholders displayed low engagement, casting votes on simply 16% of their holdings, the info confirmed.
Of the 861 resolutions regarding associated occasion transactions proposed in H1 2023-24, over 20% of institutional buyers voted towards 96, with solely 11 being defeated.
From the full resolutions, 8,573 had been strange and three,974 particular. Of those, 53 particular and 32 strange resolutions failed. Whereas 12,139 had been proposed by administration, 408 got here from shareholders, with solely 3 being unsuccessful.
Resolutions had been largely focused on board adjustments, monetary outcomes, board remuneration, and different company features.
Home mutual funds (46), on the entire, voted in favor in 92% of situations and towards in 8% of instances.
As of end-March 2023, shareholding knowledge for firms listed on the NSE confirmed promoters holding 55%, institutional buyers at 12%, particular person buyers at 24%, and the remaining 9% by different non-institutional entities.
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Up to date: 31 Oct 2023, 08:25 PM IST
Supply: Live Mint