Chennai, Jul 25 (IANS): Automobile major Tata Motors Ltd closed the first quarter of FY24 with a consolidated net profit of Rs 3,300.65 crore.

The company’s Board also approved the simplification and consolidation of its capital structure.

Tata Motors closed Q1FY24 with a total income of Rs 103,596.62 crore (against Q1FY23's Rs72,822.02 crore) and a net profit of Rs 3,300.65 crore (against a net loss of Rs.4,950.97 crore).

The Tata Motors Board at their meeting on Tuesday gave their nod for the reduction of capital by cancelling the entire 'A’ Ordinary shares and issue and alloting Ordinary shares that would rank pari passu with the existing Ordinary shares.

The holders of 'A' Ordinary shares will get seven ordinary shares for every 10 shares ('A' Ordinary shares) held by them as capital reduction consideration.

According to Tata Motors, after the delisting of the American Depository Shares from the New York Stock Exchange as of January 23, 2023, the company has two types of listed equity securities, namely Ordinary Shares and 'A' Ordinary Shares.

The 'A' Ordinary Shares carry 1/10th of voting rights of Ordinary Shares and are entitled to five percentage points higher dividend. These shares were first issued by Tata Motors in 2008 and subsequently in a further QIP in 2010 and rights issue in 2015.

Regulatory changes have, since then, restricted the issuance of such instruments with differential voting rights and Tata Motors remains the only large listed company with such an instrument, the company said.

The capital restructuring will lead to a reduction in the outstanding equity shares by 4.2 per cent, making it value accretive for all shareholders, the company claimed. Post capital rejig, the voting rights of the promoter and promoter group will go down to 42.64 per cent from 45.81 per cent while that of the public will go up to 57.36 per cent from 54.19 per cent.