Tata Motors Ltd. has received a no-objection certificate from the National Stock Exchange and Bombay Stock Exchange for the conversion of its differential voting rights shares to ordinary shares.
The NSE and BSE issued an NoC for the scheme of arrangement for the cancellation of DVRs of the company and issuance of ordinary shares, the company said in its exchange filing on Thursday.
The auto manufacturer, in its board meeting on July 25, announced the scheme of arrangement for the cancellation of DVRs, and the issue of seven ordinary shares for every 10 DVRs held by shareholders.
The DVRs of Tata Motors are known as 'A' Ordinary shares.
DVRs were introduced back in 2008, and it ruffled the feathers of capital market regulators. It was a first for the Indian market, and Tata Motors was the only one to issue it. It was called 'A' Ordinary shares as the market regulator disallowed the issuance of differential voting rights but allowed the 'A' shares to continue.
Upon completion of the restructuring of the shareholding and scheme, the effective voting rights of the promoter and promoter group will be reduced by 3.16%, the company said during the announcement.
The reorganisation of share capital will simplify and consolidate the company's capital structure and preserve liquidity, in addition to being value-accretive and beneficial for all shareholders, the company said.
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