Promoters Still Control The Vote

DECODE THE NEWS

At India Inc, Shareholder Votes Rarely Challenge Promoter Power

What?

Institutional ownership in companies may be increasing, but a recent study shows that company promoters still continue to exercise significant control, thanks to their majority stake in most companies.

In 2024, just 24 out of 4,840 resolutions put to vote by Nifty 500 companies were rejected, according to a study by proxy advisory IiAS.

Only 12 companies saw any resolutions fail, with Finolex facing the most dissent, ten resolutions, mostly on director appointments, being voted down. Nestle also faced shareholder pushback with a rejected proposal to increase royalty payments to its Swiss parent.

Rejections also involved director appointments, ESOPs, and related-party transactions—issues that typically attract greater scrutiny from institutional investors. Still, these instances remain rare, as promoters’ substantial shareholding allows them to carry most votes.

Why?

Promoters continue to hold sway because of their majority ownership. In 2024, promoters held about 51.18% of company shares, compared to 26.61% by institutions and 22.21% by other investors. This gives promoters the power to push through resolutions, even when institutional investors dissent.

According to IiAS, promoters vote nearly 100% in favour of resolutions, while institutional investors support around 96%, and retail and others vote over 99% in favour.

“Promoters vote ‘aye’ almost 100% of their shares unless there is an intra-promoter feud going on. Institutions vote about 96% for, and others are about 99% for. So the overwhelming vote is for,” Amit Tandon, managing director of IiAS, told The Core.

What Next?

Promoter ownership has declined slightly over the past three years, but their influence continues to dominate.

The regulator has been trying to correct it by limiting delegation to the board, wherein shareholders need to sign off on most decisions. These regulations include majority-of-minority approvals and ordinary to special resolutions.

A proposed solution is a formal shareholder dissent review framework, where boards must engage with dissenting shareholders, explain decisions, and consider corrective action when a significant minority votes against a resolution.

“They (promoters) just can't assume that because we've done it in the past, we have a right to do it now. Shareholders have changed, the market expectations have changed,” said Tandon.

BUILD ON BLOCKCHAIN

Blockchains Without Borders: Time For Indian Banks To Cross The Line

What?

JPMorgan Chase, America’s largest bank, has done something that could change the world of banking. In May this year, for the first time, it completed a real transaction on a public blockchain.

JPMorgan’s blockchain arm, Kinexys, used Chainlink’s technology to transfer funds between accounts and settle the purchase of tokenised US treasuries on a public blockchain called Ondo Finance.

The bank called it a structure built for “production,” which means it’s aiming for scale, not just experimentation.

What This Means

This move marks a new phase in blockchain adoption.

Until now, banks like JPMorgan have used closed and private blockchain systems to settle transactions or to digitise bonds.

With this step, a bank of JPMorgan’s size and repute is telling the world that it sees value in interacting with public blockchains — mostly associated with crypto — because of their wider reach, versatile compatibility, and open settlement.

This is a shift Indian banks would do well to watch, and perhaps start emulating.

This series is brought to you in partnership with Algorand. 

Air India Crash Aftermath. Authorities in Gujarat have identified 259 of the 260 bodies recovered from the June 12 crash of Air India Flight AI171 in Ahmedabad. The London-bound Boeing 787-8 Dreamliner crashed shortly after takeoff, slamming into a medical college hostel and bursting into flames.

By the Numbers: The crash claimed 260 lives—241 passengers, 19 on the ground—with one survivor. Authorities have identified 259 victims so far, mostly through DNA testing.

What’s Next? Authorities are awaiting the final DNA result and continue clearing the crash site. A full toll will be confirmed only after recovery is complete. An investigation is underway to determine the cause of the sudden loss of altitude.

Adani Denies US Charges: Speaking at Adani Group’s annual general meeting (AGM), Gautam Adani said no one from the group has been charged under the U.S. Foreign Corrupt Practices Act (FCPA), calling the bribery allegations “baseless.”

Catch Up Quick: In November, U.S. authorities indicted Adani and several executives, alleging they paid bribes to win Indian power contracts and misled investors. The group is also under SEBI investigation after Hindenburg Research alleged misuse of offshore entities in 2023 — claims the group has repeatedly denied.

What Else: Adani outlined a $15–20 billion annual capex plan and reaffirmed its 2030 clean energy capacity target of 100 GW.

India Seeks Alternate Sources of Rare Earth Metals. India is in talks with Japan and Vietnam as the country seeks other sources of rare earth metals, since China halted its supply, as The Core previously reported. The government also has plans for an incentive for the domestic produdction of magnets.

Backdrop: While India currently has 6% of the world’s supply of rare earth metals, it doesn’t have the technology to process them. It’s trying to change that, as The Core previously reported, by designing incentive schemes for companies to set up processing plants. 

Flashpoint: It would take at least two years for such facilities to start functioning. In the meantime, India is seeking separate sources of rare earth metals. The country is also trying to negotiate exceptions so it can import assembled and sub-assembled motors from China.

New Airport, New Fees. As Navi Mumbai International Airport (NMIA) gears up for its commercial debut, passengers will have to shell out more than just the ticket fare. The aviation regulator has approved an ad-hoc user development fee (UDF) that will be levied on all flyers, making NMIA one of the costlier gateways in the country even before its first flight takes off.

By the Numbers: Departing domestic flyers will pay Rs 620 and international passengers Rs 1,225. For arriving passengers, the fee is Rs 270 (domestic) and Rs 525 (international). Other major airports like Delhi, Bengaluru, and Mumbai also levy UDFs—Rs 207 and Rs 726 at Mumbai’s Chhatrapati Shivaji Maharaj International Airport (CSMIA).

What’s Next? Full-scale operations are said to begin in August 2025 with 20 million passenger capacity, ramping up to 90 million annually by 2040 in five phases.

😒 UGHH

Make It Public, Or Miss the Visa: The US Embassy in India has officially confirmed that all F, M, and J visa applicants — that is, students and exchange visitors — must now set their social media profiles to public, effective immediately. This is to allow consular officers to vet applicants before deciding on their entry.

Catch Up Quick: The rule follows reports that student visa appointments were temporarily paused as the US expanded its screening protocols. Now, posts on Instagram, X, or LinkedIn are no longer private territory — they could influence your visa decision.

What This Means Going Forward: While the US said this global policy has existed since 2019, India is directly impacted. In 2023–24, 3.31 lakh Indian students went to the US, including nearly two lakh postgrads. Their online activity may now be the first filter to clear before boarding a flight.

PODCAST

On Episode 615 of The Core Report, financial journalist Govindraj Ethiraj talks to Sheetal Sapale, Vice-President (Commercial) at Pharmarack. We also feature an excerpt from our upcoming weekend edition interview with Mark Kaplan, Co-Founder and Partner at WholeChain, part of our “Build on Blockchain” Series.

• Markets shrug off middle east tensions, for now

• Oil prices fall sharply as markets breathe easy

• More action in India’s weight loss drug market as more MNCs muscle in

• Tata Motors says no rare earths problem for now

• Understanding drug MNC strategy in India and what we can learn from it

• Building traceability for shrimp farmers in India exporting to the west

👥 THE TEAM

✍️ Zinal Dedhia, Salman SH, Kudrat Wadhwa | ✂️ Rohini Chatterji | 🎧 Joshua Thomas