Differential Voting Rights (DVR)

Differential Voting Rights (DVR) shares are a class of equity shares that carry voting rights different from ordinary shares — either superior voting rights (multiple votes per share) or inferior voting rights (fractional votes per share) — allowing a company to separate economic ownership from voting control. In India, SEBI permits two types of DVR structures: shares with superior voting rights (SR shares), typically issued to founders and promoters to retain control while raising public capital, and shares with fractional voting rights (FR shares) that carry a higher dividend entitlement as compensation. SEBI's framework for SR shares (introduced in 2019) is primarily aimed at technology startups listing in India where founder control is considered important for long-term value creation. Tata Motors DVR — India's longest-standing DVR share — trades on NSE and BSE at a persistent discount to the ordinary share due to its lower voting entitlement, reflecting the market's pricing of voting rights as a valuable attribute of equity ownership.