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Tata Motors’ Differential Voting Rights (DVR) share price gained 12.42 per cent on Wednesday on BSE after the company announced that it would offer ordinary shares to all DVR investors.
Tata Motors Ltd (TML) has announced its plans to offer seven ordinary shares for every 10 DVRs held.
Prior to the announcement, DVR shares were trading at around ₹370. It was trading at ₹419.45 at close on Wednesday.
Due to this surge, the premium for Tata Motors ordinary shares over its DVR shares fell to 6.99 per cent as per its swap ratio. On Tuesday, there was a 23 per cent premium to existing DVR market price.
The average traded volume for DVR shares stood at 12.5 times their monthly average, while ordinary shares volume stood at 2.8 times their monthly average.
Tata Motors has two types of listed equity securities, namely Ordinary Shares and ‘A’ Ordinary Shares (DVRs).
DVRs carry 1/10th of the voting rights of ordinary shares and are entitled to a five percentage points higher dividend.
The DVR shares were first issued by the company in 2008, subsequently in a further QIP in 2010 and a rights issue in 2015. Regulatory changes have since restricted the issuance of such instruments with differential voting rights, and TML remains the only large listed corporate with such an instrument.
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