IiAS: A Short Investor Survey

20 May 2020

IiAS conducted a short survey of investors and sell side analysts, seeking their views on some resolutions that are put to investors to vote.

   

The survey was conducted between 13-21 April. There were between 63 and 89 respondents.

A summary of the responses is given below:

  • While typically investors clamor for dividends, in this environment they showed maturity with 78% of investors preferring company’s retain cash and fortify their balance sheet.

       [Note, we have used investor as shorthand for investors and sell-side analysts]

  • A majority (57%) of investors see promoters subscribing to warrants as a sign of confidence in the company and its operations.

  • Dilution remains a concern for investors. 46% of the investors were uncomfortable if dilution exceeded 5% without a disclosure regarding how funds will be used. 30% put this threshold was 10%.

  • Surprisingly a majority support dual class shares - a class of shares that doesn’t find much support among investors in most other geographies. 

  • While a super majority (87%) were less supportive of promoter rights being embedded in AoA’s – and periodically want these voted upon, they had a more sanguine view about rights of PE Firms being embedded in a firms AoA.

  • Investors are now more open to look beyond the Big-4 audit firm - an aceptance that firms beyond the Big-4 can offer an acceptable audit serv

  • Between qualified accounts and unqualified accounts, 73% supported qualified accounts. Their rationale was that if you accept qualified accounts atleast you get to hear auditor concerns. If you ask for clean accounts, the risk is auditors will be muzzled.

 

 

You can read the survey by clicking this link.

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