Tata Motors Holders Push to List New York ADR to Boost Value

Jun 25, 2014 2:27 am ET

(Updates with comment from Tata Motors in third paragraph.)

June 25 (Bloomberg) -- Knight Assets & Co., which advises funds owning stock in Tata Motors Ltd., is pushing India’s largest automaker to list its Class A shares on the New York Stock Exchange to boost shareholder value. Tata said it had no plans to list these shares in New York presently.

Tata Motors’ ordinary and Class A shares -- which carry a 10th of the voting rights -- are “materially undervalued” and worth at least 700 rupees apiece, London-based Knight Assets said in a statement today. They traded at 445.80 rupees and 293 rupees, respectively, at 11:43 a.m. in Mumbai.

Knight Assets said it sent a letter to the Mumbai-based company on June 10 and met with management on June 20 to present its proposals. Tata Motors currently has no plans to list shares in New York, Minari Shah, a company spokeswoman, said in an e- mail.

“The solutions we have presented to the company, most notably the NYSE listing of an ADR for the ‘A’ shares, can correct this irrational discrepancy,” Akshay Naheta, managing partner of Knight Assets, said in the statement.

Tata Motors last month posted profit that missed analyst estimates as a wider loss at its local business eroded gains from its profitable Jaguar Land Rover unit. The luxury unit is helping boost the company as its sales gained 8 percent, spurred by demand in China.

The company’s ordinary shares rose 17 percent this year as of yesterday’s close. The Class A stock gained 62 percent, outpacing the 20 percent advance in India’s benchmark Sensex Index.