CNBC-TV18’s Nimesh Shah brings us some interesting numbers on the trading history and a comparison between Tata Motors and its Differential Voting Right (DVR).
Tata Motors DVR is trading at a 65 percent discount which is the highest ever discount seen on a DVR stock. DVR is basically a differential voting right share where the dividend is higher by 5 percent. However, the investor do not get the voting right.
If you look at the historical data like a 10-year data or a 5-year data, the average discount on the DVR has been around 40 percent. Brokerages have started writing about Tata Motors DVR, and they believe that with improvement in Tata Motors, you will probably see a squeeze in discount for Tata Motors DVR. If there is outperformance in the stock, we will see large outperformance on Tata Motors DVR.