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Question

What is the maximum limit to issue of DVR shares by an eligible company, as per revised SEBI regulations?

A 26% of total paid-up capital Correct Answer Incorrect Answer
B 74% of total paid up capital Correct Answer Incorrect Answer
C 26% of total voting power Correct Answer Incorrect Answer
D 74% of total voting power Correct Answer Incorrect Answer
E No such limit Correct Answer Incorrect Answer

Solution

As per the revised rules (i.e. Companies (Share Capital & Debentures) Rules, 2014)   issued by SEBI in 2019 with respect to the issue of DVRs, SEBI allowed the issue of DVRs with superior voting rights (SRs) subject to certain conditions. The limit of issue has been fixed as - the voting power of DVRs with SRs shall not exceed 74% of total voting power. Note - this limit was changed from earlier limit of 26% of the total post-issue paid up equity share capital including DVR equity shares

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