Wednesday, 20 January 2021

NORMAL SHARE VS DVR SHARE

DVR shares or share with Differential Voting Rights also carry differential dividend rights. 


✍Tata Motors was the first listed Indian company to launch its DVR. Currently there are 4 DVR shares are listed i.e. Tata Motors DVR, Jain Irrigation DVR, Future Enterprises DVR and Gujarat NRE Coke DVR.

✍DVR has lower voting rights. For example, in case of Tata Motors, its DVR's voting rights is just 10% of the normal share. 

✍The Dividend yield is higher by 10% to 20%. 

✍It is one of the best ways to raise money without parting away with the voting rights.

✍DVR shares are beneficial for retail investors who would like to earn high dividend but with lower voting rights i.e. they are not interested in how the company is run by the management. 

✍One of the key disadvantages of the DVR shares is that the traded volume is low. 

✍Moreover, the lower voting rights do not justify the incremental dividend.

✍The returns given by DVR stock is little less than normal stock as the dividend rate is adjusted in it.


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NORMAL SHARE VS DVR SHARE

DVR shares or share with Differential Voting Rights also carry differential dividend rights.  ✍Tata Motors was the first listed Indian compa...