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At the Annual General Meeting (AGM) of Voltas Ltd, which is celebrating its diamond jubilee year, there was an air of optimism among shareholders — they were hoping for an issue of bonus shares or higher dividends in view of the large reserves on the company’s books.
However, Ishaat Hussain, Chairman of Voltas, dashed their hopes saying the ‘external environment’ is very grim and the economy is ‘collapsing’.
“The board has taken note of the request for issue of bonus shares, but this was not the opportune time,” he added.
Once the board has the confidence that the company is on the growth trend/rising curve in its businesses, it would accede to the shareholders request for bonus shares, he said.
The company had last issued bonus shares in 1990 in the ratio of 1:2.
On a request for higher dividends, he said the company operates in the projects business and therefore “it was important to conserve cash and maintain liquidity.”
Rupee effect
On why the Voltas share price fell to about Rs 68 from Rs 250, the Chairman said it was due to depreciation of the rupee. The Voltas stock hit a four-year low of Rs 62.70 on September 4. The Re 1 face value stock hit an all-time high of Rs 262.5 in November 2010.
When a shareholder suggested that since the Voltas share price is ruling low, Tata’s should increase their shareholding to protect the interest of small shareholders, Hussain said it was for Tata Sons to take an ‘appropriate decision’.
On why Tata AIG sold Voltas shares in the market, he clarified that shareholding of Tata AIG was not under promoter category. The “purchase/sale of shares by Tata AIG was for and on behalf of its policyholders,” he added.
Commenting on exchange of old certificates of Rs 10 each against share certificates of Re 1 each, the Chairman stated that it was in the interest of the shareholders to ensure that the new certificates were given to the rightful owners.
Currently, about 20 per cent of shares held by small retail investors are in physical form.
badrinarayanan.ks@thehindu.co.in
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