TVS Motor bonus NCRPS: 4-for-1 issue in 2025

What TVS Motor has announced

TVS Motor Company has moved to reward equity shareholders through a Scheme of Arrangement that results in a bonus issue of redeemable preference shares. The company’s Scheme Implementation Committee approved the allotment of 6% Cumulative Non-Convertible Redeemable Preference Shares (NCRPS) on 1 September 2025. The instrument is being issued free of cost to eligible equity shareholders, with funding stated as coming from the company’s reserves. The key benefit for shareholders is that the preference shares are designed as a near-cash, tradeable security that also carries a defined coupon payable at redemption.

Key dates investors should track

The scheme has multiple dates that determine eligibility and issuance. TVS Motor’s exchange filing states the record date for determining eligible shareholders is 25 August 2025. The NCLT (Chennai Bench) sanctioned the scheme on 31 July 2025, and the scheme has been described as effective from 12 August 2025. The allotment of the bonus NCRPS is approved for 1 September 2025. The preference shares are stated to mature on 1 September 2026, aligning with a 12-month tenure from allotment.

Bonus ratio and what shareholders will receive

The bonus ratio is clearly laid out as 4:1. For every 1 equity share held as of the record date, shareholders will receive 4 fully paid-up bonus NCRPS. Each preference share has a face value of INR 10, while the equity share face value mentioned is INR 1. TVS Motor has also described the distribution as being made from surplus reserves, implying no cash payment is required from shareholders to receive the securities.

Terms of the NCRPS: coupon, redemption, and listing

The preference shares are described as cumulative, non-convertible, and redeemable. The coupon rate mentioned in the company-related text is 6% per annum, payable at redemption. The tenure is described as 12 months from the date of allotment, and the maturity date is specified as 1 September 2026. TVS Motor has also stated the NCRPS will be listed on BSE Limited and the National Stock Exchange of India Limited, which means they are intended to be tradeable before redemption.

Allotment size and ISIN details

The Scheme Implementation Committee approved the allotment of 1,900,348,456 bonus NCRPS. The ISIN provided for these securities is INE494B04019. Separately, the issue size is referenced as approximately INR 1,900.35 crore in the provided material. These specifics matter for investors who want to reconcile corporate action credits, depository updates, and the eventual listing of the preference shares.

What triggered the corporate action: NCLT-approved scheme

TVS Motor has linked the issuance to a Scheme of Arrangement approved under Sections 230 to 232 of the Companies Act, 2013. The scheme was sanctioned by the National Company Law Tribunal, Chennai Bench, on 31 July 2025. In an exchange filing excerpt included in the material, the company stated it fixed 25 August 2025 as the record date for determining eligible shareholders. It also stated that each equity share held on the record date will be allotted 4 fully paid-up bonus NCRPS of face value INR 10 each.

Why companies use bonus preference shares

The stated rationale in the material is that TVS Motor has surplus capital that exceeds foreseeable business needs, and the structure helps reward shareholders without changing their equity holdings. Because the securities are preference shares with a defined redemption timeline, the instrument is framed as providing an income component through the coupon and potential liquidity through exchange trading. The material also frames it as a capital efficiency and liquidity management step, funded from general reserves and retained earnings.

A note on coupon rate references in the material

Most of the company-linked descriptions consistently reference a 6% coupon per annum payable at redemption. However, one portion of the provided material describes a 16% coupon rate payable at redemption. The same set of details elsewhere, including the description of the allotment and other terms, repeatedly refers to 6%. Readers tracking this corporate action should rely on the company’s official exchange filings and the final security terms published for listing.

What investors need to do

The material states that no action is needed from shareholders. Eligible shareholders will automatically receive the bonus preference shares in their demat accounts based on holdings as of the record date. The securities are also described as listed and tradeable, which means shareholders may have the option to hold until redemption or trade earlier after listing, subject to market liquidity and pricing.

Summary tables: timeline and terms

Bottom line

TVS Motor’s corporate action centres on a NCLT-approved scheme to issue bonus NCRPS in a 4-for-1 ratio to eligible equity shareholders as of 25 August 2025. The allotment is approved for 1 September 2025, the securities are intended to list on NSE and BSE, and they mature on 1 September 2026. Investors will typically track demat credits, exchange listing circulars, and final security terms as the process moves from record date to listing and eventual redemption.