TATA convert its DVR shares to ordinary shares ?
Tata motors to convert DVR shares to ordinary shares ?
On Tuesday July
25 the company will issue 7 fully paid up new ordinary shares with face value
of 2rs for every 10A ordinary share with face value of 2rs
· Capital reduction convert to 23%
premium 1 to A ordinary shares price
· This will result in 4.2% reduction in
number of outstanding equity shares making it value high for all shareholder
· The above transaction is subject to
regulatory and shareholder approvals
Whole conclusion
is Tata is going to convert its DVR shares to ordinary equity shares that will
reduce load in company benefit it in long run
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tata.com
Read more
about DVR shares?
What are DVR
shares ? how they affect the Investors in India ?
Differential
voting right shares in India have been an interesting instrument in Indian stock
market. DVR shares are a type of equity shares that grants different voting
rights compared to ordinary shares of same company. In India these shares gained
popularity in recent years due to their unique characterestics providing Investors
with various benefits and opportunities
DVR shares
were introduced by securities and exchange board of India SEBI in2008 as way
for companies to raise capital without diluting their control over decision making
the idea was to attract long term investors who might be interested in holding
shares for their dividend potential while offering them a discontinued price due
to reduced voting rights
One of the
key advantages of DVR shares is that they offer a higher dividend compared to
ordinary shares companies usually issue DVR shares at higher dividend payout
making them attractive to income seeking investors this feature has been a major
draw for retail investors looking for stable income streams
However DVR
shares also have their downsides one significant drawback is the reduced voting
power DVR shareholders typically have limited voting rights some times as low
as 1/10 of voting rights of ordinary shareholder DVR shareholders have little
say in corporate matters and are less likely to influence major decisions
In terms of
market performance DVR shares price movement can be different from that of
ordinary shares the reduced liquidity and limited price volatility compared to
regular shares of the same company .
source : livemint.com
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