This document analyzes DVR (differential voting rights) shares issued by Tata Motors. It discusses that DVR shares have fewer voting rights but higher economic value than ordinary shares. Companies issue DVRs to raise funds without diluting voting control. Investors interested in DVRs prioritize economic returns over voting rights. The document also reviews historical DVR prices and holding patterns for Tata Motors, Pantaloon, and Gujrat NRE Coke. It finds DVR prices generally track but trade at a discount to ordinary shares. For Tata Motors, this discount widens when institutional holdings increase.

1. TATA MOTORS DVR AN ANALYSIS
Abhinay Mohan
PGPM – Sunstone Business School
2012 Batch

2. DVR’S?
 DVR share is like an ordinary equity share, having fewer
voting rights and most of the times having slightly higher
economic value as compared to ordinary equity share.

3. WHY COMPANIES ISSUE DVR’S?
 To fund new large products, without diluting voting rights.

4. WHY INVESTORS SHOULD BE
INTERESTED IN DVR’S?
 Investors who are not concerned about voting rights.
 Looking for higher economic value in terms of higher
discounts and also incremental dividends.
 Normally higher dividends are attached to DVR’s in order to
attract investors in lieu of less voting rights.

5. DISADVANTAGES WITH DVR’S?
 Thin traded scripts.
 DVR’s trade at a discount as compared to ordinary shares of
the company.

6. HISTORICAL EVENTS OF TATA MOTORS
DVR?
 Tata motors was the first company in India to issue DVR’s in
October 2008.
 Issue was highly under subscribed, only 34% of the issue
was subscribed.
 Promoters need to buy major portion of the issue.
 After this promoters are regularly reducing their stake in
DVR’s by selling these in open market.

7. CURRENT HOLDING PATTERN OF TATA
MOTORS DVR
3.57% 1.04%
9.10%
10.48%
27.04%
42.50%
Promoters & Group Public and Others Domestic Institutions
FII Non Promoters Corporate NRI's Foreign Individuals
 Current market price of DVR is 89 while that of normal share
is 170.3 a discount of whopping 48%.

8. PANTALOON INDIA’S DVR’S CURRENT
HOLDING PATTERN
14.60%
9.50%
46.50%
8.10%
21.30%
Promoters Public and Others Domestic Institutions
FII Non Promoters Corporate
 Price of DVR is 146.90 while original shares of Pantaloon is
trading at 198.40 a discount of 26%.

9. GUJRAT NRE COKE DVR’S CURRENT
HOLDING PATTERN
0.70%
13.43%
13.27% 45.92%
0.28%
25.10%
Promoters & Group Public and Others Domestic Institutions
FII Non Promoters Corporate NRI's Foreign Individuals
 Price of DVR is 14.75 while original shares of Gujrat NRE is
trading at 18.70 a discount of 21%.

10. INTERNATIONAL DVR’S
 There are number of companies in International markets who
have issued DVR shares.
 Google, Berkshire Hathaway (Warren Buffet) are some of the
big names to issue DVR’s.
 Apart from having differential voting rights, Berkshire is
always willing to exchange 30 shares of Class A (DVR) for a
single share of Class B (ordinary shares).
 This flexibility does not exist in any of our Indian DVR shares

11. HISTORICAL TREND OF TATA MOTOR’S
DVR PRICES?
450 50.00%
41.89% 22.15%
400 35.79% 31.22%
31.73% 45.00%
39.96% 39.85% 25.34%
45.47% 37.53%
42.34% 42.85% 28.07% 40.00%
350 28.55%
42.09%
44.46% 27.68% 35.00%
300
44.25%
44.59%
30.00%
250 39.06% 35.11%
39.82% 27.53%
43.69% 25.00%
200 46.03%
20.00%
150
15.00%
100
10.00%
50 5.00%
0 0.00%
Tata Motors DVR Tata Motors Discount %

12. HISTORICAL SHAREHOLDING PATTERN IN TATA
MOTORS DVR
120
100
11.75 13.66 13.66 10.68 10.54
14.84 15.56
80
35.37
50.17 50.17
60
70.22 70.56
75.99 75.35
40
52.88
20 36.17 36.17
19.1 18.9
9.17 9.1
0
Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11
Promoter & Group Institution Non-Institution

13. HISTORICAL TREND OF PANTALOON
INDIA’S DVR PRICES?
1000 50.00%
900 45.00%
800 40.00%
700 35.00%
600 30.00%
500 25.00%
400 20.00%
300 15.00%
200 10.00%
100 5.00%
0 0.00%
Pantaloon Retail DVR Pantaloon Retail Discount %

14. HISTORICAL TREND OF GUJRAT NRE
COKE’S DVR PRICES?
70 60.00%
60
50.00%
50
40.00%
40
30.00%
30
20.00%
20
10.00%
10
0 0.00%
GUJNREDVR(Rs.) GUJNRECOKE(Rs.) Discount %

15. IMPORTANT EVENTS TRIGGERING
CHANGES IN TATA MOTOR’S DVR PRICES?
Booking-building by Tata Sons, thorugh this promoters wanted to offload
DVR’s in the market and that too to big institutions who will hold the stock
for long.
Consistent selling by large DVR holders, IFCI and Tata Steel.
In Jun 2010 quarter Institutions increased their share from 35% to 50%
discount rose from 31% to 37%.
In Dec 2010 quarter Institutions increased their share from 50% to 70%
discount rose from 30% to 39%.
In Jun 2011 quarter Institutions increased their share from 70% to 75%
discount rose from 44% to 45%.

16. CONCLUSION
DVR’s follows trends of ordinary share prices.
There is a discount between normal shares and DVR’s due to various
reasons like Lack of awareness, hesitation by investor and low
liquidity.
Prices of DVR depends upon individual demand and supply scenario in
the market.
Discount in Tata Motors DVR widens when sustained institutional buying
is there in limited period of time. This discount narrows when buying is
reduced.
So conclusion is Buy Tata Motors DVR if you want to invest in Tata
Motors. There is no certainty of time when the discount between normal
and DVR shares will reduce.
There is no sure shot way to tell the time period in which liquidity of DVR