- Tata Motors has announced a corporate action involving the cancellation of "A" ordinary shares and the issuance of ordinary shares through an NCLT scheme of arrangement.
- The scheme aims to simplify and streamline the share capital structure of Tata Motors by consolidating all trading into ordinary shares.
- Shareholders holding "A" ordinary shares will receive seven ordinary shares for every ten "A" ordinary shares they hold as consideration.
- This represents a 23% premium to the closing price of "A" ordinary shares and values them at a 30% discount to ordinary shares.
- The transaction is cashless and will not impact Tata Motors' net debt or its auto net debt targets.
- The process involves various regulatory and shareholder approvals, and it is expected to take 12 to 15 months for completion.
- The scheme will result in a 4.2% EPS accretion for all shareholders and eliminate the discount in Tata Motors' overall market capitalization.
- The voting rights of public shareholders will increase by 3%, while the promoter's shareholding will decrease from 45.8% to 42.6%.
- Shareholders should be aware of the tax implications, including capital gains tax and withholding taxes on deemed