Institutional investor assert control in Indian cos: Report

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26 Aug, 2025 12:21

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From voicing their opinion on appointment of independent directors to opposing sale of units at lower valuations, institutional investors stepped up their engagement with Indian companies last year rather than just focusing on M&A deals, says a report. In 2014, public shareholders of several firms like Yes Bank, Siemens, Apollo Hospitals Enterprises, United Spirits, IVRCL, JSW Holdings and Adani Ports & SEZ voted against some proposals made by the firms, according to proxy advisory firm InGovern. These resolutions were voted against by more than 20 percent voting institutional shareholders.

In the past one year, institutional investors' engagement with companies have changed as they are voting against wider issues, rather than focusing only on schemes and mergers. The past year saw these investors "voting against contentious related party transactions, sale of division to promoter entity at lower cost, appointment of independent and non-executive directors due to insufficient attendance," it said. Futher, they "voted against re-appointment and approval of remuneration of promoter executive directors due to sketchy disclosures, option of converting debt into equity and even inter-corporate investments," it added.

A few years ago, these investors were mainly concerned about scrutinising resolutions that involved mergers and schemes of arrangements. According to InGovern, Yes Bank's public shareholders rejected the appointment of Ajay Vohra as an Independent Director, while shareholders of Siemens voted against the resolution of sale of Metals Technologies business to a promoter entity. Apollo Hospitals' institutional investors have rejected three resolutions relating to re-appointments of Preetha Reddy as Executive Vice Chairman, Suneeta Reddy as Managing Director and Sangita Reddy as Joint Managing Director.

Public shareholders of United Spirits Ltd (USL) voted against several related-party transactions between the company and entities controlled by Vijay Mallya's UB Group. Also, public shareholders of JSW Holdings voted against four resolutions relating to related party transactions with JSW Investments, Realcom Reality, Reynold Traders and JSW Techno Projects Management. "The resolutions proposed by Siemens, United Spirits and JSW Holdings were not passed with requisite majority, and rejected by shareholders," InGovern noted.