The automaker plans to demerge the company into distinct entities– one for passenger vehicles and other for commercial vehicles.
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Tata Motors shares declined 2.02 per cent to close at ₹648.2 on Tuesday, as shareholders convened virtually to vote on the company’s proposed demerger. The move would split the company into two distinct entities: one for passenger vehicles (PV), including electric vehicles and Jaguar Land Rover (JLR), and the other for commercial vehicles (CV).If approved, shareholders will receive one share in the newly created CV entity, Tata Motors Light Commercial Vehicles (TMLCV), for every share held. The PV business, to be called Tata Motors Light Passenger Vehicles (TMLPV), will house the company’s internal combustion engine models, EVs, and JLR operations.The demerger follows the 2022 subsidiarisation of the PV and EV businesses and is aimed at enabling each unit to raise capital independently and pursue its own growth strategies. Tata Sons is also forming a holding company to oversee the demerged units, with Group Chairman N Chandrasekaran set to chair the entity.Executives expect the process to be completed in the first quarter of FY26. The company said the gross debt will be split between the new entities based on their asset sizes, currently divided in a 60:40 ratio in favour of the CV business.