Shares of this auto company hit fresh 52 week high after shown 167 per cent increase in PAT!

DVR shares of company spiked by more than 14 per cent after plans to convert DVR shares into ordinary shares.

Tata Motors declared robust results yesterday. Investors were highly anticipated amid the company's results. Talking about the financials, for Q1FY24 in comparison to the same quarter last year, the company net profit for the first quarter which ended on June 30, 2023 increased by 166.67 per cent to Rs 3300.65 crore from net loss of Rs 4950.97 crore. In Q1FY24, the company total net revenue increased by 42.26 per cent from Rs 72822.02 crore to Rs 103596.62 crore in a similar quarter the year prior.      

Sequentially the company's net profit for the quarter which ended on June 30, 2023, decreased by 39.94 per cent from Rs 5496.04 crore. In Q1FY24, the company's total net revenue 3.64 decreased by per cent from Rs 107509.28 crore in the similar quarter the year prior.

Furthermore, the Board of Tata Motors has given its approval for a Scheme of Arrangement which involves a capital reduction of the 'A' Ordinary shares and the issuance of Ordinary shares as part of this reduction. The Capital Reduction Consideration provides an attractive premium of 23 per cent compared to the current price of the 'A' Ordinary Shares of Tata Motors.

Additionally, as part of its effort to simplify and consolidate its traded equity securities, Tata Motors plans to terminate the ADS (American Depositary Shares) program. This move, in conjunction with the proposed capital reduction of 'A' Ordinary shares, aims to streamline the company's equity structure. After the changes are implemented, only Ordinary Shares will be listed and traded on both the NSE and BSE exchanges.

To effectuate these changes, the Board of Directors of Tata Motors has approved a Scheme of Arrangement, which involves the cancellation of 'A' Ordinary Shares. In exchange for each 10 'A' Ordinary Shares they currently hold, shareholders will receive 7 Ordinary Shares as consideration for the cancellation. It's important to note that the successful completion of this transaction is contingent upon obtaining regulatory approvals and the approval of the company's shareholders.

Due to this move by Tata Motors, currently, Tata Motors DVR shares are trading at Rs 424.65, up by 13.82 per cent and have hit a fresh 52-week high today. The Ordinary shares of Tata Motors are trading at Rs 646.25, up by 1.06 per cent and they have also hit a fresh 52-week high at Rs 665.30.

Disclaimer: The article is for informational purposes only and not investment advice.