Tata Motors demerger takes effect tomorrow. Check details

Tata Motors will split its passenger vehicle (PV) and commercial vehicle (CV) businesses from October 1. Shareholders will get one share of TML Commercial Vehicles Ltd (TMLCV) for every Tata Motors share they own. The record date is expected in mid-October. After that, Tata Motors shares will trade without CV business and be renamed Tata Motors Passenger Vehicles Ltd (TMPVL).The new CV company, TMLCV, plans to list on the stock exchange by November, after all approvals. The CV unit will also get non-convertible debentures worth ₹2,300 crore.

This demerger aims to unlock value and help each business focus better. But Tata Motors shares have dropped about 32% in the past year. The Jaguar Land Rover (JLR) division faces weak demand in Europe, the US, and China. Rising costs and stiff competition in electric vehicles add to the challenges.

Analysts are cautious on the stock. Jefferies rates it as “underperform” with a target of ₹575. Motilal Oswal calls it “neutral” with a ₹686 target. Both highlight uncertain near-term prospects for JLR.