Tata Motors demerger effective from tomorrow. What is known so far on record date, listing timeline

After the completion of all formalities, the CV business will tentatively be listed in November as TMLCV, subject to the completion of all pending formalities.

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Following all regulatory approvals, the much-awaited demerger of Tata Motors‘ passenger vehicle (PV) and commercial vehicle (CV) businesses comes into effect from October 1. The JLR-maker has told analysts that the record date for demerger would tentatively be in mid-October, followed by the listing of both businesses by November.Last week, the National Company Law Tribunal (NCLT) had cleared the composite scheme of arrangement under which Tata Motors’ CV business will be spun off into TML Commercial Vehicles Ltd (TMLCV) while the PV business will be consolidated under Tata Motors, which will be renamed Tata Motors Passenger Vehicles Ltd.Under the demerger, shareholders will get one share of TMLCV for every share held in Tata Motors. The scheme also provides for the transfer of non-convertible debentures worth ₹2,300 crore to the CV entity.Tata Motors said the move will unlock value and give both businesses a sharper strategic focus, improved agility, and clearer capital allocation.

“The demerger of the commercial vehicle (CV) business is on track, and NCLT approval has been received. The effective date is 1 Oct and the record date is tentatively in mid-Oct, subject to final approval from the Registrar of Companies. The stock will trade ex-CVs on the day after the record date and will subsequently be renamed Tata Motors Passenger Vehicles Limited (TMPVL),” Jefferies said in a note after meeting Tata Motors management.

After the completion of all formalities, the CV business will tentatively be listed in November as TMLCV, subject to the completion of all pending formalities.

Tata Motors shares have been under pressure and lost around 32 per cent of their value in the last year as JLR demand outlook stays challenging in the near-term for Europe, China and the US regions.

“We are positive on India PV demand, but we see challenges for JLR, including increased competition & consumption tax in China, higher warranty costs, and the BEV transition. Moreover, its key models (RR, RR Sport, and Defender) are now 2-4 years old. We are also less convinced on PV margin improvement and the Iveco acquisition,” Jefferies said, while giving an underperform call on the stock with a target price of ₹575.The company has told analysts that, following the post-production shutdown from a cyber-attack this month, JLR will resume manufacturing in a controlled and phased manner in the coming days.

“Nonetheless, JLR is facing several headwinds, which include tariff-led slowdown for exports to the US, demand weakness in key regions like Europe and China, and rising VME, warranty and emission costs,” Motilal Oswal said while giving a neutral call on the stock with a target price of ₹686.

Led by muted growth prospects in JLR, Nuvama has also retained a reduce call on the stock with a target price of ₹680.