Tata Motors DVR Share Price: If you have Tata Motors DVR then know about the new decision, what will happen to investors
Tata Motors DVR Share Price:
The country’s largest auto company Tata Motors has taken a big decision. Tata Motors shares will be issued to those who buy Tata Motors DVRs.
First of all let’s know about Tata Motors DVR. In the year 2008, Tata Motors released DVRs. DVR means differential voting rights. DVR is like any other share, but in this the shareholder has less voting rights.
Consider something like this – Tata Motors DVR has voting rights of 1 share for 10 shares but the dividend is 5% more than the common shares. Both institutional and retail investors can invest in DVR.
DVRs generally trade at a discount of 25-30% worldwide. Due to lack of information in the Indian market, the discount on DVR is around 40-45%. Tata Motors’ DVR closed at Rs 373, up 4.29 per cent on Tuesday.
Advantage of DVR-
The company can raise money without losing voting rights. Funding of big projects is easy. The company is not afraid of open offers or forced purchases.
Now what is the decision of Tata Motors- Company has decided to issue 7 shares of Tata Motors on 10 Tata Motors DVR shares.
This clearly means that Tata Motors is now ‘Tata’ing the DVR. DVR shares will be converted into ordinary shares. DVR will be delisted from the stock exchange. DVR will be back at 23% premium.
Market value of Tata Motors DVR
The market value of Tata Motors DVR is around Rs 19000 crores.
Rajesh Agarwal, head of research at AUM Capital, says that this decision of Tata Motors is beneficial for investors.
There may be a circuit on the DVR on Wednesday. But Tata Motors may decline as this price adjustment has happened. The company will not make any difference.
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