DVR Shares Are a Valuer's Job. The Standards Go Quiet on the Number.

Section 43 of the Companies Act, 2013 recognises two kinds of share capital, equity and preference, and splits equity in two: "(i) with voting rights; or (ii) with differential rights as to dividend, voting or otherwise in accordance with such rules as may be prescribed." That second limb is the statutory basis for a DVR share.

Rule 4 of the Companies (Share Capital and Debentures) Rules, 2014 sets the operating conditions. The articles must specifically authorise it, the company needs an ordinary resolution, and it cannot have defaulted on filed financial statements, dividend payments, deposit repayment, or debenture or preference share redemption in the preceding three years.

• DVR shares cannot carry more than 74% of total voting power.
• They cannot exceed 26% of total post-issue paid-up equity share capital.
• Existing ordinary voting shares cannot be converted into DVR shares after the fact. DVR has to be issued as DVR from the start.

This is where a DVR share and a SAFE part ways completely. A SAFE fits no category the Companies Act recognises, neither equity nor debt. A DVR share is named directly inside Section 43 as a form of equity share capital.

Every trigger that applies to an ordinary equity share applies identically: a registered valuer's report under Rule 13(2)(g) before a preferential allotment, the same disclosure mechanics on a buy-back, the same role in a merger exchange ratio. There is no separate eligibility question here the way there was for FEMA pricing or a SAFE.

Checked directly against the complete text of the ICAI Valuation Standards 2018, every standard from VS 101 through VS 303 including VS 301 Business Valuation and VS 303 Financial Instruments: the phrase "differential voting rights" does not appear anywhere, and neither does "DVR" nor "voting right" as a defined concept.

The three approaches apply, as set out in Valuation Approach vs. Valuation Method: What the Words Actually Mean, but none carries a named adjustment for a voting differential the way control premium and DLOC each get their own named treatment.

This is not because the concept is obscure. A "voting premium," the price gap between superior-voting and inferior-voting shares of the same company, is a well-studied concept in academic finance, with empirical estimates ranging from roughly 5% in the United States to over 40% in markets with weaker minority protections, according to the cross-country literature on dual-class structures. It is real and measurable where both classes trade. It has simply never been written into ICAI's or IVS's named list.

• Listed, both classes quoted. The Market Approach does the work directly. The traded price of each class already reflects whatever premium or discount the market assigns to the differential. No separate adjustment is needed because the comparable is the instrument itself.
• Unlisted, the more common engagement. There is no separate market price to observe. The valuer is solving the allocation problem covered in Startup Valuation Methods: Deal Heuristics vs. Fair Value Reporting: one enterprise value allocated across classes with different rights, using an option-pricing or waterfall allocation rather than a flat per-share split.

Where the DVR share and the ordinary share carry identical dividend and economic rights and differ only in voting, that allocation, run purely on cash flow rights, lands both classes at the same per-share number. The differential starts to carry separate value only where it amounts to an effective control block, at which point the question stops being about DVR and becomes the control premium question covered in Control Premium: Explicit Duty Under IBC, Implicit Duty Everywhere Else.

Do not add a voting premium as a line item unless the differential actually delivers control, and say so explicitly in the report when it does not. No standard names the adjustment, so an unexplained one invites challenge, and identical economic rights produce identical per-share value under any defensible allocation.

Where it does deliver control, stop calling it a DVR question and document it as a control premium, which is a named adjustment with a defined place in the standards.

Permitted, named, and squarely the valuer's job. The number comes from two techniques already written down elsewhere, not a third one written for this instrument.