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Published 12:31 IST, February 4th 2025

Tata Motors Demerger: Commercial and Passenger Vehicles To Form Separate Listed Entities - Check Ratio

Tata Motors has unveiled a strategic demerger plan, splitting its business into two distinct entities—commercial vehicles and passenger vehicles.

Reported by: Business Desk
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Tata Motors
Tata Motors' plant | Image: Tata Motors

Tata Motors has announced a significant corporate restructuring plan, detailing the division of its operations into two separate listed entities: commercial vehicles (CV) and passenger vehicles (PV). 

This decision, initially disclosed in August 2024, aims to streamline operations and bolster strategic clarity for each segment.
In a statement, Tata Motors highlighted that the demerger will allow both the CV and PV businesses to independently pursue their growth trajectories and optimize shareholder value.

Tata Motors Demerger Ratio

According to the demerger scheme, shareholders will retain an identical shareholding in both entities, maintaining a 1:1 share entitlement ratio.

‘"Pursuant to the Scheme, shareholders of TML will receive ONE share of TMLCV of face value Rs 2 fully paid up for every ONE fully paid-up share of Rs 2 held in TML of the same class (Entitlement Ratio),"  as per the Tata Motors statement on its website.

"The Board of Directors of Tata Motors Ltd has approved a Composite Scheme of Arrangement involving the demerger of its CV business undertaking and the merger of Tata Motors Passenger Vehicles (TMPV) with the existing listed company," Tata Motors stated.

The demerger process is expected to conclude within the next 12-15 months, subject to regulatory approvals and the establishment of a demerger record date. Post-demerger, shares of the newly formed entities will be listed on both the National Stock Exchange ( NSE ) and Bombay Stock Exchange ( BSE ).

"This strategic move is designed to unlock inherent value within each business segment, fostering greater operational agility and market responsiveness," Tata Motors emphasized in its regulatory filing.

Updated 12:40 IST, February 4th 2025