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General equity vs DVR share of Tata Motors: investors’ dilemma

Rajni Kant Rajhans (School of Construction Management, National Institute of Construction Management and Research - Pune, Pune, India)

Emerald Emerging Markets Case Studies

ISSN: 2045-0621

Publication date: 13 August 2019

Abstract

Subject area

Finance.

Study level/applicability

Graduate/Under Graduate Progammes

Case overview/synopsis

The case presents the valuation gap between general equity and DVRs shares of TML. The case presents DVRs as an alternate asset class for investment for retail investors and shows its various characteristics taking the case of TML. The case presents global evidences of the valuation gaps and hence helps in making informed decisions. The case makes the reader perplex with a varied global evidence and then presents other data (increasing interest by institutional investors in DVRs of TML) which may help to take final decision “BUY or NOT”.

Expected learning outcomes

The readers will be able to recall “how do finance managers use a diverse type of equity for providing new sources of finance?” The readers will be able to describe the characteristics of differential voting right (DVR) shares. The participants will be able to present various reasons for the price difference between DVR shares and general equity shares. The readers will be in a position to analyze the price pattern of Tata Motors Limited (TML’s) DVR together with global experience. The participants will be able to justify the trade-off between extra dividend and loss of voting rights in the case of DVR shares.

Supplementary materials

Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

Subject code

CSS 1: Accounting and Finance.

Keywords

Acknowledgements

Disclaimer. This case is written solely for educational purposes and is not intended to represent successful or unsuccessful managerial decision-making. The authors may have disguised names; financial and other recognizable information to protect confidentiality.

Citation

Rajhans, R.K. (2019), "General equity vs DVR share of Tata Motors: investors’ dilemma", Emerald Emerging Markets Case Studies, Vol. 9 No. 2. https://doi.org/10.1108/EEMCS-01-2019-0009

Publisher

:

Emerald Publishing Limited

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