Tata Motors Shares Jump 4% After Green Signal for CV Demerger

Tata Motors shares surged 4% on May 7, becoming the leading performer on the Nifty 50 index.

The surge followed a significant strategic development and favorable global trade news, sparking investor optimism.

Market Performance

• Tata Motors stock rose 4% intraday, reaching ₹675 per share.
• It became the top gainer on the Nifty 50 on May 7.
• Despite the recent rally, the stock is down around 10% in 2025, lagging behind the Nifty index, which is up 2% YTD.
• However, a 15% recovery over the past month signals renewed investor interest.

Key Development: Demerger of CV Business

Tata Motors has received near-unanimous shareholder approval to demerge its Commercial Vehicle (CV) business into a separate, listed entity.

• The proposal secured 99.99% votes in favor.
• Initially announced in March 2024, the demerger aims to streamline operations.
• Share entitlement: For every Tata Motors share held, investors will receive one share of the newly listed CV company.

This corporate restructuring is a significant move to unlock value and enhance business focus.

India-UK Free Trade Agreement: A Strategic Boost

The demerger's timing coincides with the signing of the India-UK Free Trade Agreement, which has significant implications for the auto sector.

• Under a quota system, auto import tariffs were reduced from over 100% to just 10%.
• This change could notably benefit Jaguar Land Rover (JLR) — Tata Motors' UK-based subsidiary.
• Lower tariffs may enhance JLR's competitiveness and sales in the Indian market.

Though specific quota details remain undisclosed, the trade deal is expected to strengthen Tata Motors' position in the premium auto segment.

Company Overview

• Tata Motors is one of India's leading automotive manufacturers.
• It operates in both the passenger vehicle and commercial vehicle segments.
• The company also owns Jaguar Land Rover, a luxury automotive brand based in the UK.

The demerger and trade agreement position Tata Motors for better operational clarity and potential market expansion.

Summary

Tata Motors shares jump 4%, topping the Nifty 50 charts after shareholders approved the long-anticipated CV business demerger. Coupled with the India-UK trade deal, which slashes auto tariffs to 10%, the developments are expected to support the company's global and domestic growth strategy. Tata Motors aims to strengthen its core operations and international footprint with these moves.