Among all, only Tata Motors, Jain Irrigation and Future Retail have floated DVR (Differential Voting Right) shares on the stock exchange. These shares are like any other ordinary shares, the only thing different being that there are no voting rights to accompany them. Due to this anomaly, DVRs trade at a discount to the ordinary shares. What has come to our notice is in all three DVRs, discounts have risen in the last few months. Is this a buying opportunity then? Let's take a look.
As we can see, DVRs in all three cases are trading at huge discounts. This is apparent not only from the difference in price but also from the discount in market cap if compared to share capital. The dividends yields in DVRs are also more attractive than the ordinary shares. This opens up an opportunity for DVRs than ordinary shares but, given the fundamentals and growth opportunity, one should only go for Tata Motors among these three. Buying DVRs means you are forgoing the right to vote and therefore, you should do it only when you completely trust the management. These qualifications are visible only with Tata Motors. Buying its DVR will also entitle you to more dividend than ordinary shares and with low price converts into dividend yield which is almost twice.
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