The Hindu Business Line : Companies reinforce investor relations departments

If the latest collection of balance sheets is any indication, corporate India is increasingly paying attention to investor relations, courtesy IROs whose roles are being fine-tuned like never before. Companies are strengthening their investor relations departments, multi-tasking them and hiring more people for improved investor communication.

Reporting Standards

Companies these days need to disclose much more, feels Mr C.S. Nanda, Council Member and head of the committee on financial markets & investor protection, Institute of Chartered Accountants of India (ICAI). The current legal requirements are prompting companies to refine their reporting standards too.

The job-profile of IROs is changing as a result, others in the accounting profession comment. IROs provide definite inputs to boards of directors and become part of companies’ disclosure committees.

Investor Confidence

The responsibilities of the IRO, as Dabur has put it, include: Building interest in the firm on the buy side, anticipate market reaction towards M&As and divestitures, and building investor confidence in the firm.

Companies frequently need to convey important messages to shareholders, some of them related to performance and strategy, point out investment circles. “Communications these days is not merely about meetings with stakeholders,” notes Mr N.K. Agarwal, President, Association of NSE Members of India.

Dynamic Role

ITC Ltd has in its balance sheet pointed out how investors can make use of its Web site, which has two “exclusive sections” titled Shareholder Value and Investor Relations. Clarifications provided to institutional investors and analysts, including presentations made to them, are also posted.

Incidentally, ITC’s in-house investor service centre is accredited with ISO 9001:2000 certification. The company itself is registered with the SEBI has a Category II share transfer agent. Accounting professionals also note that company managements are attaching considerable importance to IROs. Mr A. Bandyopadhyay, member of ICAI, felt IROs will play a more dynamic role in times to come, assisting managements in understanding shareholder psyche.

Examples of corporates’ concern for shareholders are strewn all over, it may be mentioned. The latest Ashok Leyland balance sheet, for instance, discusses the feedback on results / findings of a ‘Shareholders’ Satisfaction Survey 2006,’ which has elicited over 1,660 responses.

“A large number of respondents had expressed concern about the slow movement in the share price of the company, expectation of bonus shares and also a higher quantum of dividend,” Ashok Leyland has stated, adding that the feedback has been shared with the company’s registrar and transfer agent, Integrated Enterprises (India) Ltd.

More Stories on : Investor Protection | Trends

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Kotak Mahindra, KBC tie up

Diversified equity funds broadbasing portfolios

Kotak AMC launches global fund

Expansion plans drive up Bilpower

Volatile movement

Trading turnover tops Rs 1 lakh cr in bourses

Land space talk pushes up HDIL

IVR Prime IPO subscribed 5.75 times

KPR Mill IPO opens on Aug 2

Companies reinforce investor relations departments