Tata Motors’ DVR share price witnessed a remarkable surge of nearly 18% on Wednesday, reaching a new 52-week high of ₹440 on the BSE. This significant spike came in the wake of an announcement made by Tata Motors the previous day, wherein the company revealed its decision to convert its DVR shares into ordinary shares. This conversion is expected to lead to a reduction of approximately 4.2% in the total number of outstanding equity shares, a move that is likely to be advantageous for all shareholders.
As part of this conversion scheme, Tata Motors intends to issue seven fully paid-up new ordinary shares, each with a face value of ₹2, for every ten ‘A’ ordinary shares, also with a face value of ₹2. These newly issued ordinary shares will be provided as compensation for the reduction and subsequent cancellation of the ‘A’ ordinary shares.
The company’s plan involves terminating the American Depositary Shares (ADS) and implementing a capital reduction of ‘A’ Ordinary shares. This move aims to streamline and consolidate all the traded equity securities of Tata Motors into Ordinary Shares, which will be exclusively listed on the NSE and BSE.
Earlier, in January, Tata Motors had disclosed its intention to voluntarily delist its American Depositary Shares from the New York Stock Exchange, a move that came into effect on January 23, 2023.
Furthermore, Tata Motors’ share price received an additional boost in the Wednesday trading session following the announcement of the company’s Q1FY24 earnings report. The company reported a consolidated net profit of ₹3,203 crore for the first quarter, ending on June 30. This impressive profit was primarily attributed to significant improvements in the performance of its British affiliate, Jaguar Land Rover, and the commercial vehicles division.
According to market analysts, Tata Motors’ operating revenue for the June quarter saw a substantial increase of 42% to ₹102,236.08 crore, surpassing the significant milestone of ₹1 lakh crore.
These developments have instilled a sense of optimism among investors and shareholders, leading to a surge in Tata Motors’ DVR share price and bolstering confidence in the company’s future prospects. As Tata Motors continues to strengthen its position in the market and demonstrate robust financial performance, stakeholders are closely observing the potential for further growth and value appreciation.