The reason behind Tata Motors delisting from the NYSE in 2023

Tata Motors notified the New York Stock Exchange that it intends to voluntarily delist its American Depositary Shares.

The company announced that it will delist its American Depositary Shares (ADS) from the New York Stock Exchange (NYSE) after January 2023. In a notice sent to the NYSE on Wednesday (November 10), the company informed the exchange that it will voluntarily delist its ordinary shares, as represented by the ADSs.

How does Tata Motors’ decision to delist from NYSE affect its business?

In a filing to exchanges, the company said since the ADS were issued in 2004, it has witnessed a considerable increase in liquidity and foreign shareholder participation in the equity stock markets in India.

“Tata Motors has further considered the consistent drop in the number of ADSs outstanding as a percentage of its outstanding ordinary shares. Therefore, the rationale for ADS listing in the United States has significantly diminished,” it said, as per the filing.

Thus, the company will be able to simplify its financial reporting requirements and reduce administrative costs. Delisting of its ADSs will allow it to concentrate on trading its equity shares on the NSE and the BSE.

As soon as the ADSs are delisted from the NYSE, there will be no over-the-counter market trading of them in the United States, the company said.

Additionally, the company reported a net loss of Rs 944.61 crore in the second quarter ending September 2022, compared to a loss of Rs 4,441.57 crore a year ago.

In the second quarter ending September 2022, its consolidated revenue from operations increased by 29.7% to Rs 79,611.37 crore.

Visit Money Scaler to be updated with latest trends.