Sunday, November 5, 2017

DVRs In Indian Context




  1. Voting Rights . Lesser Voting rights 
    1. Tata Motors    -  DVRs has 1/10 of voting rights of regular share 
    2. Jain Irrigation -  DVRs has 1/10 of voting rights of regular share 
  2. Dividend -  Might be more for DVR shares 
    1. TataMotors - 5% extra for DVR 
    2. Jain Irrigation - Same level of dividend 
  3. Market Price 
    1. TataMotors - DVR discounted between 20% to 45% historically . Refer to Picture 1 
    2. Jain Irrigation - DVR discounted between  25% to 45% historically Refer to Picture 2
    3. Internationally discount is around 10%. Needs to be substantiated  .
  4. Dividend Yield 
    1. Due to #2 and #3 , dividend yield for DVR shares is substantial higher . 
    2. Tata Motors    :  40% - 136% more yield for DVR 
    3. Jain Irrigation : 34%  - 103% more yield for DVR



    Picture1




  Picture 2 




1 comment:

  1. Yes, DVR shares gives an very small incremental (0.2% to 1.0%) dividend to the market share. But an investment decision is mostly on trading gains than the dividend payout and am still cautious to invest in DVR

    a. Traded volume too less than normal stock
    b. No correlation between DVR & normal stock price - they don't trend in sync.

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