Tata Motors Demerger: Key Dates, Shareholder Entitlement & Commercial Vehicle Spin-Off

Tata Motors has officially split its business, marking a major restructuring in India’s auto sector. The demerger, effective October 1, 2025, separates the commercial vehicle (CV) operations from the passenger vehicle (PV) business, creating a new entity called TML Commercial Vehicles Limited (TMLCV).

The move aims to streamline operations, giving both divisions more focus while providing shareholders with a clear entitlement to the new commercial vehicle company.

Market Reaction and Share Price

Following the demerger:

• Tata Motors’ passenger vehicle shares closed at ₹395.50, down 0.88% from the adjusted price of ₹403.66.
• The stock opened on BSE at ₹399, a sharp fall from the previous close of ₹660.90.
• Early trading reflected a 40% drop during the initial hours after the adjustment for the demerger.

The market reaction reflects the adjustment of Tata Motors’ share price to separate the commercial vehicle business value.

Understanding the Demerger

Under the approved demerger scheme:

• Commercial Vehicle Division: Carved out into TML Commercial Vehicles Limited (TMLCV)
• Passenger Vehicle Division: Remains with Tata Motors, renamed Tata Motors Passenger Vehicles Limited

The demerger allows each business to operate independently, aligning management focus and resources to their respective growth segments.

Share Entitlement:

• Ratio: 1:1
• Shareholders receive 1 fully paid-up share of ₹2 in TMLCV for each share held in Tata Motors as of the record date

Important Dates for Shareholders

Shareholder eligibility and related corporate actions follow a clear timeline:

• October 1, 2025: Demerger becomes effective; CV business spun off to TMLCV
• October 10, 2025: Record date for transferring non-convertible debentures to TMLCV
• October 14, 2025: Shareholder record date; investors holding Tata Motors shares on this date receive TMLCV shares

These dates are crucial for investors to track their entitlements and understand when their holdings in TMLCV will be credited.

Listing and Pricing for TMLCV

The new commercial vehicle company, TMLCV, is expected to be listed within 60 days, potentially by mid-November. The stock is likely to trade in the range of ₹320 to ₹470 per share.

Factors supporting this range include:

• Recovery in the domestic commercial vehicle industry in H2 FY26
• GST rate reduction on CVs from 28% to 18%
• Rising replacement demand and growth in infrastructure, construction, and logistics sectors
• Integration with Iveco Group NV, expected in FY27, exposing TMLCV to global CV market cycles

Summary

The Tata Motors demerger marks a significant event for shareholders and the auto industry:

Key Points:

• Demerger Effective: October 1, 2025
• Shareholder Record Date: October 14, 2025
• CV Business Spin-Off: TML Commercial Vehicles Limited
• Share Entitlement: 1 TMLCV share per Tata Motors share
• PV Business: Continues as Tata Motors Passenger Vehicles Limited
• Listing of TMLCV: Expected within 60 days, potential trading range ₹320–470

The split provides clear visibility into each business’s performance and enables shareholders to directly benefit from the growth of both passenger and commercial vehicle divisions.