Tata Motors said on Tuesday would cancel its 'A' ordinary shares, which would reduce the number of its overall outstanding shares by 4.2%, to simplify its capital structure.

The company will issue seven ordinary shares for every 10 'A' ordinary shares as consideration, implying a 23% premium on the previous day's closing level of 'A' ordinary shares, Tata Motors said in a regulatory filing.

The 'A' ordinary shares were first issued by Tata Motors in 2008 and then via a share sale in 2010 and rights issue in 2015.

These class of shares currently trade at a 43% discount to the company's ordinary shares.

The automaker had in November announced plans to delist its American Depositary Shares from January, roughly around 18 years since they first started trading. (Reporting by Chris Thomas in Bengaluru; Editing by Savio D'Souza)