The Securities and Exchange Board of India last year imposed a quota of at least one female director on the board of every listed firm, and last month Sebi head UK Sinha warned of "very serious" consequences if companies did not comply.
Despite a last-minute rush of appointments to meet the April 1 deadline, more than 200 firms have not complied, and many of those which have, have responded by installing company bosses' female relatives with no professional experience, analysts said.
"It's a mockery of the law. The compliance has substantially been done in letter and not in spirit," Pranav Haldea, managing director of PRIME Database, a market research group, told the Thomson Reuters Foundation.
"More than half the companies have appointed their relatives onto the board, who will speak in the same voice as their promoters and so the diversity being sought by Sebi has been defeated."
Preliminary figures from the PRIME database showed 247 out of 1,478 firms listed on the National Stock Exchange of India had not appointed any women directors by 5 p.m. on March 31.
Reliance Industries, India's largest conglomerate by market value, has installed the wife of chairman Mukesh Ambani, while the stepmother of tycoon Vijay Mallya now sits on the board of Mangalore Chemicals and Fertilizers.
Other companies which have appointed female relatives of key executives as directors include Raymond Ltd, Asian Paints, Godhra Phillips, Videocon Industries and JK Cement.
"I think it is a worry. This should not be about tokenism. The intent was really to get more women professionals into the boardrooms," said industrialist Kiran Mazumdar-Shaw, chairman and managing director of Biocon Limited.
"Having said that, at least we are breaking that particular male bastion and we are at least including women in the boardroom, even if they are from the promoter's families," she told the NDTV news station late on Tuesday.
Mazumdar-Shaw said Sebi should revise the order to make it clear that only independent women can be recruited onto boards.
Some of the companies guilty of non-compliance are large state-owned corporates such as energy firms Oil and Natural Gas Corporation, GAIL and Bharat Petroleum Corporation.
They are likely to face stiff punishment from Sebi, Haldea said, adding that penalties could include suspension from trading, freezing of promoters' shareholdings or even a fine of up to Rs 250 million ($4 million).
Firms argue that there is a scarcity of professionally qualified women to fill positions in the boardroom, but Haldea said that was simply not the case.
"That is really just a bogey. There are plenty of highly qualified women out there in sectors such as banking and finance, but they are not being allowed to join this old boys' club," he said.
"Only a thousand or so qualified women are needed. Is it really that hard to find these women in India?"
The scarcity of women in the boardroom is not unique to India - nearly one-fifth of the world's 200 largest companies have no women directors, according to an August 2014 report by Biz Divas, a national network of professional women.
Some western countries such as France, Italy and Norway have made it compulsory for larger firms to have women on their board. As a result, in Norway women's representation on company boards surged to 41 per cent in 2013 from 7 per cent in 2003.
But the largest economies – the United States, China and Japan - have no quotas for women and have had the lowest increase in female directors, suggesting that companies do not bring women onto the board unless they are forced to.