Shareholders, may see a gap-up start on Wednesday morning after Tata Motors announced the conversion of DVRs . 

1. Gap-Up Start after  Conversion Announcement 

2. Scheme of Arrangement  for Capital Reduction 

Tata Motors' board approved a scheme of arrangement to reduce the company's capital by canceling the entire 'A' Ordinary Shares . 

3.  Value Accretive  Conversion 

The conversion of Tata Motors DVRs into ordinary shares is seen as value accretive and beneficial for all shareholders.

4. Conversion Ratio for  Tata Motors DVR Holders 

Shareholders of Tata Motors DVRs will receive 7 fully paid-up shares of Tata Motors for every 10 DVRs they hold. 

5. Evaluating the Spread

The spread between Tata Motors shares & DVRs is around 20% in favor of DVR holders. 

6. Unwinding of Existing  Spread Positions 

DVR/ordinary share spread holders should consider unwinding their positions if the spread narrows to around 8-10 per cent. 

7. Ideal Spread for Fresh Positions 

Considering the conversion timeline, Nuvama recommends an ideal spread of 15 per cent for setting up fresh positions. 

8. Conversion  Approval Requirement

The completion of the conversion process would require approval from regulatory bodies, including Sebi, shareholders, creditors, and NCLT. 

9. ICICI Prudential Mutual  Fund's Significant Holding 

ICICI Prudential Mutual Fund holds the largest share (19.4 per cent of equity) in Tata Motors DVR. 

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