Why the Demerger Matters for Tata Motors and Investors

An important turning point in the company's restructuring process has been reached with the official completion of Tata Motors Ltd.'s long-awaited demerger of its passenger and commercial vehicle businesses. October 14 was set aside as the record date to determine which stockholders were entitled to acquire shares in the new company, Tata Motors Commercial Vehicles Ltd (TMLCV), when the demerger went into effect on October 1, 2025.

Two Independent Listed Entities

The National Company Law Tribunal's (NCLT) Mumbai Bench approved the split of Tata Motors into two distinct listed companies under the approved Composite Scheme of Arrangement:

• Jaguar Land Rover (JLR), electric vehicles, and passenger cars will all be housed under Tata Motors Passenger Vehicles Ltd (TMPV).

• Trucks, buses, pickups, and other commercial vehicle operations will be the primary emphasis of TML Commercial Vehicles Ltd (TMLCV). ​

Each Tata Motors shareholder will receive one share of TMLCV for each share they already own under the scheme's 1:1 share distribution provision.

Leadership and Strategic Focus

Under the new arrangement, Shailesh Chandra will be in charge of the passenger car division, which includes the EV and JLR activities, while Girish Wagh will serve as CEO and Managing Director of the commercial vehicle venture.

According to Chairman N Chandrasekaran, the change will result in increased operational flexibility, strategic clarity, and sharper focus, allowing each company to pursue its own growth goals and generate long-term shareholder value. ​

Market Reaction and Share Price Movement

Before the record date, investors priced in the restructuring impact and awaited post-demerger price discovery, causing Tata Motors shares to drop for the seventh straight session, ending at ₹664 on October 13 — down more than 11% year-to-date in 2025.​

The demerged commercial vehicle firm was able to learn its pricing during a special pre-opening session on October 14. Within 45 to 60 days of obtaining clearances, TMLCV shares would be listed separately on the NSE and BSE.

Analyst Outlook

Both firms have been valued nearly equally by brokerage company Nomura, which has set target prices of ₹367 per share for the PV arm and ₹365 per share for the CV arm. While the CV division is anticipated to profit from infrastructure investment and a resurgence in logistical demand, analysts anticipate that the PV company will benefit from new EV launches, robust holiday demand, and increased premiumization. ​

A Landmark Restructuring

Initiated by a board vote in March 2024, the Tata Motors demerger signifies a significant organisational change for the biggest carmaker in India. The Tata Group hopes to establish two specialised companies that can react more quickly to possibilities and problems unique to the sector by separating high-growth EV and passenger operations from commercial manufacturing.​

For Tata Motors, this is the start of a new age that will be centered on maximizing value, boosting innovation, and strengthening its position in both local and international markets.