Tata Motors, the auto giant, received approval from its board for the NCLT scheme of arrangement, which involves canceling the ‘A’ Ordinary Shares or DVR shares. As part of this scheme, the company will eliminate DVR shares and instead issue ordinary shares to shareholders. For every 10 DVR shares held, DVR shareholders will receive 7 ordinary shares.
As a result of this swap, the shareholding of the promoter and promoter group will see a reduction of 3.16% post-DVR exchange.
DVR stands for differential voting rights.
DVR shares are designed to provide shareholders with different voting rights compared to regular equity shares. In a typical company, investors receive one voting right for each share they own, meaning each shareholder has one vote per share. However, DVR shares may grant either more or fewer voting rights than regular shares, depending on the company’s structure.
High-Differential Voting Rights (DVRs) provide shareholders with greater voting power compared to regular shareholders, while Low-Differential Voting Rights (DVRs) offer fewer voting rights in comparison to regular shares.