Indian shareholders becoming more assertive: IiAS

MUMBAI: It is no secret that Indian shareholders in the publicly listed companies are most docile globally, but that could be changing gradually, according to IiAS.

“Indian equity shareholders are increasing their proactive engagement with companies.

A new class of investors are vocalizing their opinions and casting their vote, rather than exiting their shareholding at the first whiff of a disagreement with management decisions.

In just the last eighteen months, 37 resolutions have been defeated by shareholders,” IiAS said.

Industry trackers say that the change in the regulatory environment could be one of the main reasons for the change.

All the regulators including the SEBI and the RBI have been focusing on the shareholder protection and it has resulted in gradual change, say experts.

Even several regulations in the new Companies Act are creating better corpora rate governance standards for Indian companies.

“For long, retail investors were large holders in equity – but over the last decade, the retail has given way to FII’s and domestic mutual funds, accountable in turn to their depositors.

Anecdotal evidence from other geographies suggests that once institutions approach 30% ownership, their engagement with companies deepens. Institutional holdings in India are now at this level.

This enables shareholder engagement to become meaningful in its impact,” IiAS said in a statement.