You received fewer Tata Motors shares than expected after the merger because the company sold some of your shares to cover the Tax Deducted at Source (TDS) on the deemed dividend. Let’s break it down with an explanation and a new example:
What is a deemed dividend?
In the merger, a portion of the company's accumulated profits is treated as a "deemed dividend." Even though you don’t receive this as cash, the tax authorities treat it as if it were a dividend paid out to you. This deemed dividend is subject to tax, and the company deducts TDS on your behalf to pay the tax.
Example:

• Expected Shares: Suppose you held 200 Tata Motors DVR shares. Based on the merger's 10:7 swap ratio (for every 10 DVR shares, you get 7 Tata Motors shares), you were expecting to receive 140 Tata Motors shares in exchange for your 200 DVR shares.
• Deemed Dividend and TDS: During the merger, the company calculated a deemed dividend of ₹150 per DVR share. For your 200 DVR shares, the total deemed dividend comes to:

₹150 × 200 shares = ₹30,000
The company is required to deduct 10% TDS on this deemed dividend, which equals:
10% of ₹30,000 = ₹3,000
This ₹3,000 TDS is paid to the government on your behalf. You can claim this amount later as a tax credit when you file your income tax return. The company will send you a TDS certificate for this purpose.

• Why Shares Were Sold: To cover the ₹3,000 TDS, the company sold a portion of your Tata Motors shares. Let’s assume Tata Motors' share price at the time was ₹1,500 per share. To pay the ₹3,000, the company would sell approximately 2 shares:

₹1,500 × 2 shares = ₹3,000

• Actual Shares Received: Initially, you were expecting to receive 140 Tata Motors shares based on the 10:7 swap ratio. However, after selling 2 shares to cover the TDS, your final share count would be:

140 shares - 2 shares = 138 shares

• What Happens to Extra Money?: If any extra money is generated from selling fractional shares or if the sale of shares fetches more than what’s needed for the TDS, the leftover amount will be credited directly to your bank account within 45 to 60 days.
• How Does This Impact Your Purchase Price?: Let’s say you originally invested in 200 Tata Motors DVR shares at ₹200 per share, making your total investment ₹40,000. After the 10:7 swap, your new average price for the Tata Motors shares would be:

New average price = ₹40,000 ÷ 140 shares = ₹285.71 per share

• How Will Taxes Work When You Sell?: When you eventually sell your 138 Tata Motors shares, your capital gains will be calculated based on the new average price of ₹285.71 per share. For example, if you sell the shares at ₹1,800 each, your gain per share would be:

Capital gain per share = ₹1,800 (sale price) - ₹285.71 (purchase price) = ₹1,514.29 per share
For 138 shares, your total capital gain would be:
Total capital gains = ₹1,514.29 × 138 shares = ₹208,971.02
Since you already paid tax on the ₹30,000 deemed dividend, this amount is subtracted from your capital gains, leaving ₹178,971 as your taxable capital gains.
Summary:
You received fewer Tata Motors shares because the company sold some of your shares to pay TDS on the deemed dividend, which is a portion of the company's accumulated profits treated as dividend income during the merger. You can claim this TDS when filing your taxes, and any excess from share sales will be credited to your account.