How Shareholders Influence The Stock Performance Of The Bse Sensex Companies?

Abstract

Investors expect returns in the form of dividends and capital appreciation which constitute them to reinvest and enable the expansion of the business and value addition to the company. Apart from economic conditions, market stability, market forces, and earning capacity of the firm, the company’s internal matters like shareholders on board voting, and presence in the meetings do affect the external sources of investment and market performance of the stock. This study has been carried out to understand the relationship of the Stock Performance, measured in terms of Price-Earnings ratio, Tobin’s Q ratio, and Return on Equity with Shareholder Engagement determinants and to know the impact of Shareholders’ Engagement on the Stock Performance of the BSE-SENSEX companies and found that all the metrics of Stock Performance, such as, Price-Earnings ratio, Tobin’s Q ratio, and Return on Equity are positively related but not all statistically significant except Return on Equity. The study has observed that Shareholder Engagement Quality has shown a Positive impact on Return on Equity and Tobin’s Q ratio but not on the Price-Earnings ratio, whereas Shareholder Engagement through Voting and Shareholder Engagement through Participation in Annual General Meeting have a negative impact on Return on Equity while Size and Leverage have a negative impact on the Tobin’s Q ratio.