Weaker the results, later the AGM

By: |
April 21, 2021 5:15 AM

According to proxy advisory firm IiAS, despite an accommodative regulatory environment that allowed companies to hold their AGMs virtually, those with weaker financial results preferred to wait till the very end of the season to interact with their investors.

The trend is accentuated if state-owned banks are excluded. In FY20, for example, of the 49 NIFTY 500 companies that reported losses, 57% of them held their AGMs between September and December.The trend is accentuated if state-owned banks are excluded. In FY20, for example, of the 49 NIFTY 500 companies that reported losses, 57% of them held their AGMs between September and December.

If the numbers aren’t too good, it’s best to put off meeting the shareholders for as long as possible. That has been India Inc’s strategy for many years now. Companies with relatively weaker financial performance wait till the last minute to hold their AGMs, a trend that continued into FY21.

According to proxy advisory firm IiAS, despite an accommodative regulatory environment that allowed companies to hold their AGMs virtually, those with weaker financial results preferred to wait till the very end of the season to interact with their investors.

IiAS found that for the seventh straight year, the median return on equity (ROE) is typically the lowest for companies that hold their AGMs held towards the end of the season.

The trend is accentuated if state-owned banks are excluded. In FY20, for example, of the 49 NIFTY 500 companies that reported losses, 57% of them held their AGMs between September and December.

The trend is accentuated if state-owned banks are excluded. In FY20, for example, of the 49 NIFTY 500 companies that reported losses, 57% of them held their AGMs between September and December.

The analysis reveals that as more mid-sized and smaller firms are added to the sample,the concentration of AGMs in September intensifies. As a consequence, meetings overlapped and several investors were forced to choose one over the other.

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