Monday, 19 August 2019

New DVR rules of Companies Act enable promoters of Indian firms to retain control



The Ministry of Corporate Affairs has amended the provisions relating to issue of shares with Differential Voting Rights (DVRs) provisions under the Companies Act with the objective of enabling promoters of Indian companies to retain control of their companies while as they raise equity capital from global investors with DVR shares now making up 74 percent of total voting rights instead of 26 percent earlier.

The key change brought about through the amendments to the Companies (Share Capital & Debentures) Rules brings in an enhancement in the previously existing cap of 26 percent of the total post-issue paid-up equity share capital to a revised cap of 74 per cent of the total voting power in respect of shares with Differential Voting Rights of a company, according to an official statement.
Another key change brought about is the removal of the earlier requirement of distributable profits for 3 years for a company to be eligible to issue shares with Differential Voting Rights.

The above two initiatives have been taken by the government in response to requests from innovative tech companies and startups and to strengthen the hands of Indian companies and their promoters who have lately been identified by deep-pocketed investors worldwide for acquisition of controlling stake in them to gain access to the cutting edge innovation and technology development being undertaken by them.

The Government had noted that such Indian promoters have had to cede control of companies which have prospects of becoming Unicorns, due to the requirements of raising capital through the issue of equity to foreign investors.
Alongside the above two changes, another major step taken is that the time period within which Employee Stock Options (ESOPs) can be issued by startups recognized by the Department for Promotion of Industry & Internal Trade (DPIIT) to promoters or Directors holding more than 10 percent of equity shares, has been enhanced from 5 years to 10 years from the date of their incorporation.

About

Parag Patil is a technical analyst and trading system designer with stock excel programmer. I hope the articles and live chart of nse future and mcx on this Website will be as helpful and profitable to you . I try to update and post new articles tips everyday. My motto is to encourage the traders, so that they should able to understand the technique views behind the moment of stocks. I have deeply analyzed with many technical indicator with parameter and added to my amibroker afl. And even taken backtest report which is never being implemented. Any of the analyst expect me. Seeing all this you may understand that my views is more technical than commercial. If you are profited by my views I fill happy.

0 comments:

Dear Friends,
Sorry to say that you are suffered for the chart initially available, now they are restored and you can very well see the chart on money99.org similar to money99.in.
And all of you are intimated that we are going to develop more and more in money99.org to facilitate your dreamy demands.

© Copyright 2015 Money99. Designed by Parag Patil