What Are DVR Shares (Differential Voting Rights)?

DVR shares — shares with Differential Voting Rights — are a special class of shares that carry different (usually fewer) voting rights than ordinary shares, typically in exchange for some compensating benefit like a higher dividend or a lower price.

The basic trade-off

An ordinary share usually gives one vote. A DVR share might give, say, one vote for every ten shares — far less say in company decisions — but in return it often pays a slightly higher dividend or trades at a discount to the ordinary share. You're trading voting power for economic perks.

Why companies issue them

DVRs let a company raise equity capital without the founders or promoters giving up as much control, since the new shares carry diluted voting power. For an investor who cares about returns more than about voting in the AGM, that can be a fair deal — especially at a discount.

Why they often trade at a discount

In practice, DVR shares of the same company usually trade below the ordinary shares, because the market prices in the reduced control. Whether that discount is a bargain depends on how much you value voting rights — most small retail investors don't exercise them anyway. They're relatively uncommon in India but worth recognising when you see two share classes for one company.