Now streaming the next big hit: India Inc’s virtual AGMs

An astute investor with a stake in more than 1,000 companies, Ashalata Maheshwari is known for her tendency to break into shayaris (Urdu couplets) at Annual General Meetings (AGMs) and hog time. This year, too, she did it, but differently.

The 84-year-old investor, who was once called Ashalata Mangeshkar by no less than Ratan Tata, logged into the Reliance Industries AGM from the comfort of her home, assisted by her family members. She did not let the digital medium deter her as she sang paeans to Reliance Industries Chairman and Managing Director Mukesh Ambani virtually.

‘Satyug beeta, Kalyug aaya, par aap ka roop badal na paya,

Aap aaj bhi wahi hai jo dhool mai phool khilade…)

(The good era passed, the new era arrived, but your form did not change, you are still the same, you are still the one who can grow flowers in the dust..)

“I also told the RIL chairman that just as he made the company debt-free, he should also help shareholders in becoming debt-free. I suggested modes such as an IPO (Initial Public Offering) of Jio Platforms for it,” the octogenarian said.

Covid impact

With the lockdown due to Covid-19, companies are left with no choice but to hold virtual AGMs via videoconferencing and other audio-visual means. But despite the initial scepticism over whether these virtual AGMs would work, they do seem to be getting blockbuster turnouts. And, the agenda seems to be met with practically no technical glitches and no interruptions from combative shareholders.

The country’s first ever virtual AGM — Tata Consultancy Services shareholders meet on June 11 — saw 1,300 people log in digitally, compared to the 500-600 who would turn up at the physical event at the 1075-seat Birla Matushree auditorium in Mumbai.

“What are the new opportunities that TCS can tap into,” was the question by Arun Kumar Bopanna, while Vijayalakshmi Narendra, another shareholder, wanted to know if TCS had stalled any projects during the Covid-19 pandemic.

Reliance AGM

But it was Reliance Industries that broke all records in attendance at its virtual AGM on July 15. The company that on occasion has held events at football grounds and in cricket stadia logged in nearly half a million viewers from 40 countries.

While the 25th AGM of TCS, hosted on the National Securities Depositories Ltd’s online platform, saw shareholders prefixing questions with “Am I audible?” or “Can you hear me?”, by the time it was RIL’s turn, investors seemed to be getting comfortable with the new medium.

Many are in favour of this becoming a permanent arrangement. Though at the moment the hastily issued circular by the Ministry of Company Affairs permitting virtual AGMs (the Companies Act, 2013 did not have a provison for this) is worded as allowing it “throughout 2020”. Would that extend further is anybody’s guess.

In Bengaluru, where traffic snarls are caused every year on the Bengaluru-Hosur Road when the Infosys AGM is held, this year the road was empty. The shareholders, who brave the traffic and make an annual pilgrimage to listen to NR Narayana Murthy, Nandan Nilekani and other top brass of the IT firm, logged in smoothly into the virtual company’s AGMon June 27. About 1,771 shareholders attended the videoconference meet.

“I am concerned about the strength and stability of the company, especially during these times,” Sadananda Shastri, a long-term Infosys shareholder, said.

While virtual AGMs of many companies, much like their physical ones, went on for hours, that of State Bank of India got over in half-an-hour flat. This was one AGM where the bank’s top brass had it easy as many shareholders preferred to state their opinions and shower praise.

Benefit of virtual meet

Though the advantages of virtual meets — ease of attendance, convenience, etc — are undeniable, several shareholders had grouses, too. Analysts, for instance, complained about having to share questions in advance. Activist shareholders worried that they could be muted out at the click of a button.

Others said they missed the camaraderie of the physical meet.“In a virtual environment, there is no interactivity and body language cannot be ascertained,” said Kapil Chopra, an HNI who has invested in India’s leading tech and manufacturing companies.

So, post the lockdown, would shareholders prefer a virtual or physical AGM?

Chopra is of the view that it should be a hybrid model. “People who cannot come should attend virtually but it definitely should not be entirely conducted virtually,” he said.

(With inputs from K Ram Kumar)

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