Shillong, July 25: Automobile major Tata Motors Ltd has recorded a consolidated net profit of Rs 3,300.65 crore in the first quarter of FY24. The company’s total income for Q1FY24 stood at Rs 103,596.62 crore, significantly higher than Rs 72,822.02 crore in Q1FY23. This marks a notable turnaround, as it comes after a net loss of Rs 4,950.97 crore in the corresponding quarter of the previous year.
As per IANS, in addition to the positive financial results, Tata Motors’ Board has given its approval for simplifying and consolidating the company’s capital structure. As part of this decision, the capital will be reduced by canceling all ‘A’ Ordinary shares and issuing Ordinary shares that will rank pari passu with the existing ones.
Holders of ‘A’ Ordinary shares will receive seven ordinary shares for every 10 ‘A’ Ordinary shares they currently hold, as consideration for the capital reduction. The ‘A’ Ordinary Shares carry 1/10th of voting rights of Ordinary Shares and are entitled to a higher dividend by five percentage points. These shares were first issued by Tata Motors in 2008, and additional issuances occurred in 2010 and 2015.
Tata Motors is the only large listed company with such instruments offering differential voting rights, as regulatory changes have restricted the issuance of such shares since then.
The capital restructuring will result in a 4.2% reduction in outstanding equity shares, which the company believes will be value accretive for all shareholders. After the restructuring, the promoter and promoter group’s voting rights will decrease to 42.64% from 45.81%, while the public’s voting rights will increase to 57.36% from 54.19%.
The move is expected to streamline the company’s equity structure and drive shareholder value, further reinforcing Tata Motors’ position in the market.
