Tata Motors ADRs to be delisted from NYSE effective Monday

Tata Motors said its American Depositary Shares (ADS) will be delisted from the New York Stock Exchange effective Monday.

“After January 23, 2023, there will be no over-the-counter market trading of the ADSs in the United States due to regulatory restrictions under Indian law,” the automaker said in a release.

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 31%.

On Monday, shares of Tata Motors ended 1.3% higher at Rs 408.40 on the National Stock Exchange. The ADRs ended 2.3% higher at $24.88 on the NYSE on Friday.

Delisting will help simplify the company’s financial reporting requirements and reduce administrative costs, Tata Motors said.

The company has not arranged for the listing and/or registration of the securities on another US securities exchange.

The ADS holders can surrender their units to the depositary in exchange for the underlying ordinary shares of the company by July 24, 2023.

The delisting of ADS will have no impact on the trading of the company’s shares on the Indian stock exchanges. Tata Motors is not making any offer to buy the ADSs or the underlying ordinary shares.

The company expects to deregister from the US Securities Exchange and terminate its reporting obligations under the Exchange Act.

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