Tata Motors DVR share price surges 18%: What are DVR shares, what conversion to Tata Motors shares mean, and more
₹440 on BSE in opening deals on Wednesday(July 26) a day after Tata Motors announced it will convert its DVR shares to ordinary shares which will result in a 4.2 per cent reduction in the number of outstanding equity shares, making it value accretive for all shareholders. As Mint reported, Tata Motors announced on Tuesday (July 25) along with its results that, upon the effectiveness of the Scheme, the company will issue 7 fully paid-up new ordinary shares with a face value of ₹2 for every 10 'A' ordinary shares with a face value of ₹2. This issuance will serve as consideration for the reduction and cancellation of the 'A' ordinary shares.
The termination of the ADS (American Depositary Shares) along with the proposed scheme of capital reduction of ‘A’ Ordinary shares will simplify and consolidate all traded equity securities of Tata Motors into Ordinary Shares listed only on NSE and BSE. Earlier in January, Tata Motors said the voluntary delisting of its American Depositary Shares, representing ordinary shares, from the New York Stock Exchange, would become effective close of trading on January 23, 2023. Read more: Tata Motors to convert DVR shares to ordinary DVR stands for differential voting rights.
Experts pointed out the first DVR shares were issued by Tata Motors in 2008. DVR shares are designed to give different voting rights to their shareholders compared to regular equity shares. For example, in a company, investors get one voting right for one share.
This means each shareholder has one vote per share they hold. However, DVR shares may have either more or fewer voting rights than regular shares, depending on the company's structure. In the case of High-Differential Voting Rights, shareholders have more voting
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