Tata Motors shares in focus as demerger takes effect on October 1

Tata Motors’ demerger takes effect on October 1, splitting its commercial and passenger vehicle businesses into two independent entities.

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Shares of Tata Motors will be in focus on Wednesday as the company’s much-awaited demerger comes into effect today, October 1, officially separating its commercial vehicle (CV) and passenger vehicle (PV) businesses into two independently listed entities.The restructuring, approved in August last year and backed by the National Company Law Tribunal (NCLT), is aimed at unlocking value, enhancing capital allocation efficiency, and strengthening strategic focus for each business vertical.Under the demerger, Tata Motors‘ commercial vehicles division, along with related investments, will be hived off into a new company, while the passenger vehicles segment—including the electric vehicle (EV) business and Jaguar Land Rover (JLR)—will continue under the existing listing with a new name.The PV business will now be called Tata Motors Passenger Vehicles Ltd (TMPVL), and the newly created CV business will be listed separately as Tata Motors Ltd (TML) by November 2025, subject to regulatory approvals.

The record date, which determines shareholder eligibility to receive shares in the new CV company, is tentatively set for October 14, 2025, according to domestic brokerage firm JM Financial, pending final clearance from the Registrar of Companies.

Shareholders will receive shares of the new CV company around early November, roughly 30 days after the record date. The demerger follows a 1:1 share swap ratio, meaning investors holding Tata Motors shares as of the record date will receive one share of the new CV company for every share held.

No additional action or payment is required from shareholders; the allotment will be processed automatically and reflected in their demat accounts.

For instance, a retail investor holding 50 shares of Tata Motors on the record date will retain 50 shares in TMPVL and receive 50 shares in the newly formed TML, resulting in a total of 100 shares in their demat account.Each stock will trade independently with separate tickers and valuations. Once the demerger is completed and listings finalised, investor demat accounts will show two distinct holdings, one for TMPVL and another for TML, allowing independent valuation, trading, and investment flexibility. Investors are expected to closely monitor Tata Motors’ stock performance today as the company enters a new chapter in its corporate structure.On Tuesday, shares of Tata Motors closed 1.2 per cent higher at ₹680.45 on the BSE.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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