Tata Motors Shares Rise As Company Delists ADSs From NYSE; What Investors Should Know

Tata Motors Share Price Today: Tata Motors confirmed that the voluntary delisting of its American Depositary Shares (the ADSs), representing Ordinary Shares of the Company, from the New York Stock Exchange (the NYSE) will become effective close of trading on the NYSE on 23 January 2023. This follows the filing by the Company of Form 25 with the Securities and Exchange Commission on 13 January 2023.

Tata Motors share price gained about 2per cent, or 9, to Rs 417.40 in early trade on January 24. The stocked opened higher by Re 1, but then further built on the gains.

After Monday, there will be no over-the-counter market trading of the American Depositary Shares (ADSs) in the US due to regulatory restrictions under the Indian law, Tata Motors said in a regulatory filing.

In November 2022, Tata Motors had said it plans to voluntarily delist its ADS. The company was listed in the US in 2004. Each ADS of Tata Motors represents 5 ordinary shares of the company.

While the stock has seen an increase in liquidity and foreign participation in India, there has been a persistent drop in the number of depositary shares outstanding over the last few years.

Therefore, the rationale for ADS listing in the US has significantly diminished, Tata Motors said.

In the last 3 years, the share value of Tata Motors in India more than doubled, while that of ADRs have returned only about 31per cent.

The stock hit a 52-week high of Rs 519.50 on January 31, 2022 and 52-week low of Rs 366.05 on May 12, 2022.

Tata Motors December Quarter Results Today

The carmaker is also expected to announce its December quarter results later today.

On a standalone basis, Kotak Institutional Equities sees Tata Motors’ losses narrowing to Rs 26.50 crore in the December quarter from Rs 215.70 crore loss in September and Rs 610 crore loss in the year-ago quarter. Revenue is seen rising 17.7 per cent YoY to Rs 14,544 crore compared with Rs 12,352.80 crore in the same quarter last year. Margin is seen expanding to 5.2 per cent from 4.4 per cent in September and 2.4 per cent in the corresponding quarter last year.

“We estimate standalone business revenues to decline by 3 per cent QoQ in Q3FY23 led by 5 per cent QoQ decline in volumes and 2 per cent QoQ increases in ASPs due to richer product mix mix. Overall, we expect Ebitda margin to improve to 5.2 per cent in Q3FY23 from 4.4 per cent in Q2FY23 led by RM tailwinds,” it said.

On a consolidated basis, Kotak sees profit at Rs 800 crore against a loss of Rs 1,796 crore in the year-ago quarter. Sales are seen rising 14.50 per cent YoY to Rs 82,718 crore, Kotak said.

Motilal Oswal sees consolidated profit at Rs 160 crore. India business outlook remains healthy led by strong growth in PVs and CVs, it said. JLR volumes may grow YoY due to easing chip shortage issue, it said. The brokerage estimated Ebit margin of 3.7 per cent for JLR, supported by mix, softening RM and cost control.India Ebitda margin is estimated to expand 50 bps YoY due to easing RM cost inflation.

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