Tata Motors demerger effective from 1 October; New entity shares to be issued

New Delhi: India's leading automobile company, Tata Motors Limited, is planning to demerge its commercial vehicle business. The company announced at an analyst meeting that the demerger will be effective October 1st, 2025. The new entity will be listed in November 2025, with a record date set for mid-October. Under this demerger, Tata Motors shareholders will receive one share of the new entity for every share they hold. Demerger Process Tata Motors approved the demerger in August 2024. The National Company Law Tribunal (NCLT) has also approved it. Following the demerger, the company will split into two separate entities. The previously listed company will be renamed Tata Motors Passenger Vehicles Limited (TMPVL). The commercial vehicle business will be listed separately as Tata Motors Limited. Following GST rate cuts, Tata Motors is set to launch three SUVs priced under 10 lakh rupees Tata Motors' Stock Market Performance Tata Motors' stock declined on 30 September. Its share price fell 0.83 percent to Rs 666.90 on the BSE during the day. The company's market cap has reached Rs 2.47 lakh crore. Tata Motors' shares have declined by approximately 30 percent in the past year. As of the end of June 2025, promoters held a 42.57 percent stake in the company. [caption id="attachment_160466" align="aligncenter" width="1024"] Tata Motors to split into two entities[/caption] Brokerage Firms' Sentiment and Stock Ratings Brokerage firms have a mixed view on Tata Motors' stock. Jefferies has issued an 'Underperform' rating with a target price of Rs 575. Motilal Oswal has issued a 'Neutral' rating with a target price of Rs 686. Nuvama Institutional Equities has a 'Reduce' rating with a target of Rs 680, while JM Financial has downgraded the stock from 'Hold' to 'Reduce' with a target of Rs 689. Tata Motors launches new 9-Seater Winger Plus; Know its all features and price Future Prospects and Challenges Brokerage firms say that while demand for passenger vehicles in India remains strong, several challenges remain for Jaguar Land Rover (JLR). For Tata Motors, this demerger holds the potential for better performance in the future by making the company more focused and stronger. The demerger of Tata Motors' commercial vehicle business will be effective from October 1, splitting the company into two parts. New shareholders will receive shares of the new entity in proportion to their shareholdings. This process is expected to enable the company to operate its business more efficiently and provide greater transparency to investors. Investors should periodically check the record date and listing information for the demerger. Tata Motors' commercial vehicle business to be demerged from 1 October.