Non-Voting Shares

Non-voting shares are a class of equity shares that entitle the holder to economic participation — dividends, capital gains, and a share of assets in liquidation — but do not carry voting rights at shareholder meetings. They differ from ordinary equity shares which carry both economic rights and voting rights. In India, SEBI permits listed companies to issue differential voting rights (DVR) shares — a structure where some shareholders hold shares with superior voting rights (typically promoters) while others hold shares with inferior or no voting rights in exchange for a higher dividend. This structure allows promoter-founders to retain control over the company even as they dilute their economic stake through public market fundraising. Tata Motors DVR shares are the most prominent example in India — traded separately on BSE and NSE at a discount to the ordinary shares due to their lower voting power. SEBI's regulations on DVR shares are designed to protect minority shareholders while allowing founders to maintain strategic control.