A DRIP is a no-premium takeoverAs I understand it, shareholdres must direct register their shares to participate in the company-operated DRIP, in order to participate on equal terms to Paros. Brokers have their own DRIPs, but they're executed in the open market. Can your broker subscribe you in streetname, i.e., without DRS? Furthermore, foreign shareholders cannot DRIP, and those holding in RRSP, TFSA, RESP, or RIF cannot direct register shares. Many more will not do it because they don't know how, it's too much trouble, or they don't want their shares to lose marketability.
On an illiquid stock this open market DRIP will be problematic for execution. In addition, some shareholders can buy more shares with the cash from the dividends (which is taxed first) but not everyone can buy more. Regardless of how many shareholders participate in broker DRIPs, in aggregate they will be diluted. It's about a 0.2% gross buy-in per year for Paros, at the despressed market price, as the minority is diluted by 1% of 20%, but without requiring them to find the shares or transact on the exchange, where there aren't many shares available. 1% dilution is not a lot. But suppose they increase the dividend to $1/quarter. That's $80m/year for Paros, or 5 million shares at $16. Paros's interest goes from 20/25 or 80% to 25/30 or 83%, which is a gross dilution of 3 1/3% per year. The company could do this for a couple of years to dilute the minority. Anything to keep transferring economic interest in the firm's valuable long-term assets to the controlling shareholder at the lowest possible price. To avoid paying a premiun for as long as possible.
The fair thing to do would be to do a SIB, or offer a fair price in a buyout, or sell the company. But Rai didn't get to where he is by being generous, did he? So here we are with this new corporate action which amounts to an involuntary takeunder, for anyone who legally can't, doesn't know how to, can't be bothered to do the paperwork, or doesn't want to turn their marketable shares into an interest in effectively a private company run by Mr Sahi.