Jain Irrigation: Exit rush hits differential voting rights

Differential voting rights, or DVRs, of Jain Irrigation Systems hit a new low amid rush to exit the securities that were offered free of cost to the shareholders by the company. The discount at which the DVRs are quoting in relation to the shares widened significantly from 18% on the day of listing (November 30) to 56% on Thursday.

Attributing possibilities behind the sharp fall in DVR prices, brokers said low voting right could have prompted many DVR holders to cash out and invest money in ordinary shares of the company. Some of them may have done so to average out cost of their existing holdings in the shares, feel brokers.

This has also reflected in relatively better performance of Jain Irrigation Systems shares. They rose 3.3% while the DVRs slipped 42% between November 30 and December 7.

The stock, however, fell 4.5% to 115 on Thursday when DVR crashed further to close 7.4% down at 50.9 on the BSE. Recently, Jain Irrigation Systems allotted one bonus DVR for every twenty ordinary shares held by the existing shareholders.