Tata Motors Demerger 2025: Passenger & Commercial Vehicle Businesses Go Separate

Tata Motors has taken a significant step by demerging its Commercial Vehicle (CV) business from the Passenger Vehicle (PV) operations. This strategic move marks a milestone for shareholders and sets the stage for clearer valuation and independent growth for both entities.

Market Performance on Demerger Record Date

The record date for the Tata Motors demerger was October 14, 2025. On this date, shareholders holding Tata Motors stock received one share of Tata Motors Commercial Vehicles Limited (TMLCV) for every one share of Tata Motors, a straightforward 1:1 entitlement ratio.

Following the demerger, Tata Motors PV shares began trading ex-demerger at ₹400 per share on the NSE, compared with a pre-demerger close of ₹660.75. This implies a residual value of ₹260.75 per share attributed to the CV business.

Main News: Share Allotment & Trading

• Share Allotment: 368.23 crore fully paid equity shares of face value ₹2 each were allotted to eligible shareholders of TMLCV.
• Next Milestone: TMLCV shares are expected to be listed on BSE and NSE within 45–60 days following stock exchange approvals.
• PV Business Opening Price: ₹400 per share on NSE, representing the carved-out passenger vehicle segment.

This separation ensures that investors now hold stakes in two independent and focused entities, enhancing clarity and long-term visibility for each business.

Company Details: Two Distinct Entities

1. Tata Motors Passenger Vehicles Limited (TMPV)

• Includes domestic passenger vehicle business, electric vehicle (EV) division, and Jaguar Land Rover (JLR).
• JLR contributes approximately 87% of revenue, while domestic business accounts for 13%.
• Holds investments in other group companies like Tata Sons, Tata Steel, and Tata Technologies.

2. Tata Motors Commercial Vehicles Limited (TMLCV)

• Covers domestic commercial vehicle operations.
• Includes subsidiaries like Tata Daewoo Mobility Co. (South Korea), TML Smart City Mobility Solutions, and Tata Motors Body Solutions.
• Will integrate the Iveco commercial vehicle business (acquisition expected in 2026).
• Holds a 4.7% stake in Tata Capital through its subsidiary, TMF Holdings.
• Proposed listing on BSE and NSE in November 2025.

Summary: What This Means for Shareholders

The demerger provides clear separation, allowing each business to pursue independent growth strategies.

• Passenger Vehicle Business (TMPV): Focused on EV growth and luxury vehicles through JLR.
• Commercial Vehicle Business (TMLCV): Positioned to capitalize on market leadership and upcoming synergies from Iveco acquisition.

With independent listings, both PV and CV units are expected to have better price discovery and operational clarity. Shareholders now have the advantage of holding stakes in two strategically distinct businesses, each with its own growth trajectory and value proposition.