Tata Motors - Delisting from NYSE

Tata Motors - Delisting from NYSE
Case Code: FINC215
Case Length: 7 Pages
Period: 2004-2023
Pub Date: 2024
Teaching Note: Available
Price: Rs.200
Organization: Tata Motors
Industry: Automotive
Countries: India
Themes: Stock Market
Tata Motors - Delisting from NYSE
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

TATA Motors Limited, a leading automobile company in India (a unit of the TATA Group, (a leading multinational conglomerate in India), has a significant global presence. Since its inception in 1945, TATA Motors Limited has diversified into different automobile-related businesses and has become one of the top players in India’s commercial and passenger vehicle segments. The company has been fundamentally strong, consistent, and stable.

In 2004, the company’s management decided to go in for listing on the New York Stock Exchange (NYSE). Listing on the NYSE is considered part of gaining visibility in the global markets. Listing on the American stock exchange creates an opportunity to get funds in dollars and visibility for the company in the international markets.

The 2020s have seen significant changes in the global and Indian capital markets. The Indian capital markets have turned robust. Regarding the visibility brought by the American listing, Tata Motors became a globally renowned automobile company after acquiring Jaguar and Land Rover from Ford Motors in 2008. At the same time, the listing came with a set of statutory obligations and norms as per the Sarbanes and Oxley Act. The act specified strict internal controls and monitoring, disclosures, and annual and quarterly filing procedures. The stringent compliance involved considerable costs for the company. For Tata Motors, this spending did not add any value and it was therefore looking at reducing the global compliance costs.

Hence, Tata Motors decided to delist the company from the NYSE and communicated this information to the United States Securities Exchange Commission (USSEC) on January 13, 2023. Accordingly, the last date for trading on the NYSE was January 25, 2023. The final settlement for all the shareholders was to be completed before July 30, 2023.

Issues

The case is structured to achieve the following teaching objectives:

  • To understand the reasons behind the delisting of a foreign company from American stock exchanges like the NYSE
  • To discuss the delisting process of a foreign company from the American Stock Exchanges (NYSE).
  • To analyze the effects of delisting on the shareholders of a foreign company from the American Stock Exchanges (NYSE)

Contents

Keywords

Tata Motors; NYSE; IPO; Listing; delisting; JLR; acquisition; global footprint; disclosures; filings; USSEC; Listing in the US markets; business environment; ADS; compliance; Form 15F; ordinary shares;

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