Tata Motors DVR stock update: TML Securities Trust sells 1,14,97,462 new ordinary shares

Tata Motors DVR shares: Tata Motors Ltd on Tuesday informed stock exchanges that TML Securities Trust has sold 1,14,97,462 new ordinary shares (NOS) on the stock exchanges for the purpose of distribution of fractional share entitlement to DVR shareholders as well as towards tax liabilities, as per the scheme of arrangement.

Tata Motors said it would intimate the ‘A’ ordinary shareholders individually as well as to the stock exchanges upon the distribution of cash as well as credit of NOS. Tata Motors DVR shares were suspended for trading from stock exchanges and the record date for the same was September 1.

On Tuesday, Tata Motors shares fell 2.42 per cent to Rs 964.25 level. The Tata group stock saw a turnover of Rs 3,461.09 crore on NSE and Rs 520 crore on BSE. Media reports suggested that 1.9 crore shares Tata Motors shares or 0.4 per cent of the total equity of the company changed hands in a block deal today.

In a filing to BSE, Tata Motors Ltd said: "The aforesaid intimation has been communicated to us today by Axis Trustee Services Limited, the Independent Trustee, which will now proceed to distribute sale proceeds in cash to the eligible ‘A’ Ordinary shareholders and credit the balance NOS as per entitlement to their respective demat accounts, shortly."

As per the scheme, Tata Motors were to issue seven paid up new ordinary shares of the face value of Rs 2 each for every 10 ‘A’ ordinary shares of the face value of Rs 2 each, as consideration to the ‘A’ ordinary shareholders of the company as on the record date.

The cancellation of the ‘A’ ordinary shares and the consequent issuance and allotment of the ordinary shares under the scheme were to be treated as deemed dividend. Tata Motors was under an obligation to deduct tax at source (TDS) on the said dividend at applicable rates in accordance with the provisions of the Act.

Tata Motors' allotment committee, as empowered and authorised by the board of directors, earlier approved the allotment of 35.59 crore NOS of the face value of Rs 2 each fully paid-up, including fractional entitlements, to TML Securities Trust on September 1.

The TML Securities Trust, an independent and irrevocable determinate private trust, of which Axis Trustee Services Limited is an Independent Trustee, was required to sell the requisite number of new ordinary shares to discharge obligations in relation to withholding tax and taxes on sale of shares including STT & other expenses relating to the sale, and to distribute the remaining new ordinary shares to the 'A' ordinary shareholders.