2 weeks Ago
Mumbai : Companies are facing less dissent from shareholders these days. Shareholder resolutions with more than 20% dissent from institutional shareholders dropped to 16% in the recently concluded proxy season, down from 17% in the previous two fiscals, as per data from primeinfobase.com.
In actual numbers, 1,581 out of 10,092 resolutions saw more than 20% of institutional shareholders express their dissent in FY25 so far. However, 98% of them still passed, mostly owing to high promoter holding in the companies. Even resolutions completely voted against by shareholders at shareholder meetings held in the first half of FY25 declined to 0.
59% from 0.68% in the same period last year. Historically, resolutions related to board appointments, excessive executive compensation, and misallocating company funds have often faced opposition from institutional investors.
These money managers are signalling their disapproval by voting against such proposals in shareholder meetings. ET Bureau Stock Trading Point & Figure Chart Mastery: A Comprehensive Trading Guide By - Mukta Dhamankar, Full Time Trader, 15 Years Experience, Instructor View Program Stock Trading Stock Valuation Made Easy By - Rounak Gouti, Investment commentary writer, Experience in equity research View Program Stock Trading Commodity Markets Made Easy: Commodity Trading Course By - elearnmarkets, Financial Education by StockEdge View Program Stock Trading Mastering Options Selling: Advanced Strategies for Success By - CA Manish Singh, Chartered Accountant, Professional Equity and Derivative Trader View Program Stock Trading Algo Trading Made Easy By - Vivek Gadodia, Partner at Dravyaniti Consulting and RBT Algo Systems View Program Stock Trading Technical Trading Made Easy: Online Certification Course By - Souradeep Dey, Equity and Commodity Trader, Trainer View Program Stock Trading Derivative Analytics Made Easy By - Vivek Bajaj, Co Founder- Stockedge and Elearnmarkets View Program Stock Trading Macroeconomics Made Easy: Online Certification Course By - Anirudh Saraf, Founder- Saraf A & Associates, Chartered Accountant View Program Stock Trading Technical Analysis Demystified: A Complete Guide to Trading By - Kunal Patel, Options Trader, Instructor View Program Stock Trading Options Trading Course For Beginners By - Chetan Panchamia, Options Trader View Program Stock Trading Technical Analysis for Everyone - Technical Analysis Course By - Abhijit Paul, Technical Research Head, Fund Manager- ICICI Securities View Program Stock Trading Options Trading Made Easy: Options Trading Course By - Anirudh Saraf, Founder- Saraf A & Associates, Chartered Accountant View Program Stock Trading Complete Guide to Stock Market Trading: From Basics to Advanced By - Harneet Singh Kharbanda, Full Time Trader View Program Market experts said companies are now more attentive to minority shareholders, actively engaging with investors to address their concerns. “This is an encouraging sign as it shows that companies are continuing to take cognisance of minority shareholders’ interests and are also engaging with investors to understand their concerns prior to proposing resolutions,” said Pranav Haldea, managing director of Prime Database Group.
“Credit for this needs to be given to the facility of e-voting being made mandatory, the stewardship codes which have been introduced by regulators, a greater role being played by proxy firms as also a steady increase in institutional holding,” he added. Several resolutions from companies like Adani Enterprises , Adani Ports , Apollo Hospitals , Bajaj Auto , BPCL , Cipla , HCL Technologies , Hindalco , JSW Steel , M&M, Tata Motors , Wipro , and Trent saw over 20% of institutional shareholders cast negative votes. Some resolutions proposed by companies such as Dish TV , Finolex Industries , Globus Spirits , Hindustan Construction, Lumax Auto, MRO-Tek, Ramco Cements, Sundaram Finance, and Solar Industries, among others, did not pass in FY25.
“Nowadays, companies are exercising heightened caution in anticipation of backlash, given the scrutiny from shareholders and regulatory bodies,” said Shriram Subramanian, founder and MD of InGovern Research Services. “Companies have begun engaging with shareholders, especially institutional investors, more frequently before making major decisions.” Market regulator Securities and Exchange Board of India (Sebi) introduced the Stewardship Code for all mutual funds and all categories of alternative investment funds (AIFs) on July 1, 2020, and asked institutional investors like banks, insurance companies, and pension funds to follow the ‘transparent’ Stewardship Code to be accountable to their clients and beneficiaries.
The regulator mandated that all mutual fund schemes vote on the resolutions, even if the company’s equity shares are passive investments through an index or exchange-traded fund (ETF), effective April 1, 2022. (You can now subscribe to our ETMarkets WhatsApp channel ).
