Tata motors DVR

Tata Motors DVR shares are up 19 per cent since March 28 as compared to 4 per cent gain in Tata
Motors stock over the same period. The huge discount between the two category of shares has led
to a sharp rise in Tata Motors DVR.
Tata Motors DVR is currently trading at over 45 per cent discount to Tata Motor shares, though
analysts say there is no reason why DVR shares should trade at a discount to ordinary shares.
However, as the discount narrows, the performance in DVR shares is likely to be in line with ordinary
shares.
The Tata Group now owns only 0.88 per cent of DVR shares, while FIIs and DIIs own 49 per cent
and 39 per cent respectively. Only 11 per cent of Tata Motors DVR shares are in retail hands.
As of 10.15 a.m., Tata Motors DVR traded 1.82 per cent higher at Rs.234.65 as compared to 2.14
per cent rise in Tata Motors shares.
Here's all that you need to know about Tata Motors DVR.
What is a DVR share?
DVR stands for Differential Voting Right. Companies issue DVR shares to prevent any hostile
takeover and dilution of voting rights. This also helps strategic investors who are looking at a big
investment in a company, but with fewer voting rights. A Tata Motor DVR has 10 per cent voting right
as compared to an ordinary Tata Motor share.
Why should retail investors invest in DVRs?
DVRs are suitable for retail investors who are not concerned with voting rights as they don't intend to
affect the decision making of the management. The same company's shares are available at a
lesser price for the same fundamentals. Besides, Tata Motors DVR fetches 5 per cent higher
dividends as compared to ordinary shares of Tata Motors.
What are the disadvantages?
DVR shares are usually thinly traded. Also, during bearish phase, the discount over Tata Motors
shares could widen and this could be a dampening factor.






Ttmt/a trading at all time high june 12, 2014
Shares of Tata Motors with differential voting rights (DVR) are in demand and soared over 5% to Rs
313, its record high on the Bombay Stock Exchange (BSE).

The stock opened at Rs 294 and has seen huge trading activity on the counter. At 1425 hours, a
combined 4.11 million shares changed hands on the BSE and NSE.

Tata Motors ordinary shares however, trading higher by 1% at Rs 449 on the BSE. The stock
opened at Rs 446 and touched a high of Rs 451 so far.

Meanwhile, the gap between the DVR shares and ordinary shares narrowed to 31% today, also its
lowest level since January 2008. The discount was 47% in last month and high of 56% in October
2000.

Tata Motors DVR has 10% of the ordinary voting rights and higher dividend per share by 5% than
the aggregate dividend rate for main shares.

According to analyst at Angel Broking, globally, the DVR shares have been trading either at parity or
very small discount to their main shares.

Furthermore, stocks like Volkswagen have their DVR form trading at premium to main shares.
Successively, we assume Tata Motors DVR shares which are trading at 46.7% discount to main
shares, to rise until the discount gap reduces to 25.0% in coming two years, analyst said in a report
dated April 7, 2014.

Considering the target price for Tata Motors at Rs 487 and expectation of the discount to reduce to
25.0% over recommend Buy rating on Tata Motors DVR with a target price of Rs 365, added
analyst.









Ttmt/a surges 10%
Tata Motors Differential Voting Rights (DVR) shares surged as much as 10.2 per cent to Rs. 326.05
on Thursday outperforming Tata Motors shares, which traded 2 per cent higher.
Traders bought Tata Motors DVR amid speculation that Tata Motors is planning to issue American
Depository Receipts (ADR) to give an exit route to its institutional DVR investors in US, where the
DVR stock is not traded.
"We will share the details once finalised at an appropriate time," a Tata Motors spokeswoman told
Reuters in a statement, without elaborating.
Large investors want to exit Tata Motors DVR as the stock is trading at a massive discount to
ordinary shares. As per BSE data, closing price of Tata Motor DVR on June 18 was Rs. 295.8 as
compared to Rs.433.85 in Tata Motors, a discount of nearly 32 per cent.
Asia Pacific-focused brokerage CLSA says this issue will allow DVR holders to convert their DVRs
into ADR. In the process the discount in the DVR will be reduced.
Sushil Choksey, director at Rosy Blue Securities, said Tata Motors upside from JLR's expansion
plans is huge and it will also benefit from a pick-up in commercial vehicles in domestic market. If the
ADR plans go through, the downside is protected and "people would be happy to own Tata Motors
DVRs on the upside", he added.
CLSA has advised existing holders of Tata Motor shares to switch to Tata Motor DVR shares to take
benefit of this price differential.