Tata Motors has announced that it will delist its DVR shares from the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) on or around July 23, 2023. The company’s board of directors approved the delisting proposal on July 12, 2023.
DVR shares, or differential voting rights shares, are a type of equity security that gives shareholders fewer voting rights than ordinary shares. Tata Motors issued DVR shares in 2008 to raise capital. However, the company has since decided to delist the shares because they are no longer considered to be a strategic asset.
The delisting of DVR shares will not affect the ownership structure of Tata Motors. The company’s promoters will continue to hold a majority stake in the company, regardless of whether the DVR shares are listed or not.
Why is Tata Motors Delisting DVR Shares?
There are a few reasons why Tata Motors is delisting DVR shares. First, the company believes that the DVR shares are no longer a strategic asset. The DVR shares were issued in 2008 to raise capital, but the company has since raised enough capital through other means. Second, the delisting of DVR shares will simplify Tata Motors’ capital structure. The company will no longer have to keep track of two different types of equity securities. Third, the delisting of DVR shares will make it easier for Tata Motors to attract institutional investors. Institutional investors are often reluctant to invest in companies that have DVR shares because they give shareholders fewer voting rights.
What Will Happen to DVR Shareholders?
DVR shareholders will be compensated for their shares when they are delisted. The compensation will be based on the market price of the DVR shares on the day of delisting. DVR shareholders will also have the option to convert their DVR shares into ordinary shares.
Swipe Ratio : for every 10 DVR Shares u will get 7 TATA MOTORS Shares
What Does This Mean for Tata Motors?
The delisting of DVR shares will simplify Tata Motors’ capital structure and make it easier for the company to attract institutional investors. The delisting will also remove a potential overhang on the stock price. However, the delisting will not have any material impact on Tata Motors’ business operations.
Conclusion
Tata Motors’ decision to delist DVR shares is a logical one. The DVR shares are no longer a strategic asset for the company, and their delisting will simplify Tata Motors’ capital structure. The delisting will also make it easier for Tata Motors to attract institutional investors.