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Public shareholders in listed firms displayed an increasingly active role in the latter’s board decisions over the past week, reflecting an improvement in shareholder activism.

Proxy advisory firm Institutional Investor Advisory Services (IiAS) said in a report on Monday that multiple voting outcomes over the last week reveal the decisions of institutional investors on dozens of board resolutions. IiAS said it had sent out voting recommendations for 25 resolutions during the last week, and “all of them were approved".

Some resolutions faced strong opposition from institutional investors, indicating their dissent on certain key appointments and financial decisions taken by company boards.

The average percentage of voting by shareholders stood at 74.91% for the past week, with one resolution having more than 75% of the institutional investors voting against, and 11 resolutions with 100% of the institutional investors voting in favour.

For instance, 70.05% institutional investors voted against a resolution that sought to appoint Anuj Singh as the managing director and CEO of Spencer Retail Ltd. Spencer’s Retail, a part of RP-Sanjiv Goenka Group, is a multi-format retailer, with 120 stores in 35 cities, engaged in FMCG, fashion, food, and others.

Listed entities file voting data with stock exchanges within two working days from the conclusion of the board meeting. This data is filed under three categories of shareholders—promoters, institutional investors, and others.

In Gujarat State Fertilizers and Chemicals Ltd (GSFC), the board faced significant resistance from institutional investors, with 76.78% voting against the resolution to appoint Raj Kumar as the chairperson and non-executive non-independent director of the company. GSFC comes under the Gujarat government’s chemicals and petro-chemicals ministry, with the Gujarat State Investments holding 21.38% in the company.

In Lumax Auto Technologies Ltd too, the board faced opposition, with 58.83% institutional investors voting against the resolution aimed at increasing the borrowing limit to 500 crore over and above the company’s paid-up share capital. The company, a part of the Lumax-DK Jain Group, makes automotive components.

Further, 50.16% of the institutional investors in Indiabulls Real Estate Ltd voted against a resolution to appoint Sachin Shah as executive director for a five-year term. Indiabulls Real Estate has 15 on-going projects with a total saleable area of 33.91 million sq. ft. under its wing. It has a commercial development arm with a leasable area of 3.15 million sq.ft. under construction.

The IiAS note said that in Aegis Logistics Ltd, 49.96% of institutional investors voted against a resolution to reappoint Raj Chandaria as managing director for five years. The company is an integrated oil, gas and chemical logistics firm and one of India’s top importers and handlers of LPG among private players.

At platform and content provider firm MPS Ltd, 37.06% of the institutional investors voted against a resolution to reappoint Rahul Arora as the CEO and managing director for five years. MPS is a provider of platforms and learning solutions for the digital world, established as an Indian subsidiary of Macmillan (Holdings) Ltd in 1970.

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Updated: 22 May 2023, 11:20 PM IST
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