Weighted Voting Rights (WVR) refer to a special class of shares that grant certain shareholders—typically company founders or promoters—enhanced voting power compared to ordinary shareholders. Under this system, a single WVR share carries multiple votes, whereas a regular share generally carries one vote. This structure is designed to help visionary leaders maintain control over strategic decisions while still allowing the company to raise capital from public investors.

In India, SEBI (Securities and Exchange Board of India) introduced the WVR framework in 2019 to encourage innovation-driven companies, especially in the technology sector, to list on Indian exchanges. The framework allows the issuance of Superior Voting Rights (SVR) shares to promoters holding executive positions, subject to specific eligibility and governance conditions. These shares cannot be transferred and automatically convert into ordinary shares under circumstances like loss of control or after a fixed period.

Key conditions under SEBI’s WVR framework include a maximum voting ratio of 10:1, stringent corporate governance standards, and enhanced disclosure requirements. This ensures that while promoters retain decision-making authority, the rights of minority shareholders remain protected. Independent directors, audit committees, and periodic shareholder approvals play a crucial role in maintaining transparency and accountability.

From an investor’s perspective, understanding the implications of WVR shares is essential. While they may offer growth opportunities by empowering founders to focus on long-term innovation, they also limit minority shareholders’ influence in governance matters. Therefore, evaluating a company’s governance practices, financial health, and long-term vision becomes critical before investing.

In summary, Weighted Voting Rights represent a balance between entrepreneurial freedom and investor protection, enabling dynamic companies to innovate while maintaining market integrity under SEBI’s regulatory oversight.