Tata Motors shares witnessed a sharp decline of nearly 40 percent on Tuesday after the company completed the demerger of its commercial vehicle business. The stock was discovered at ₹400 per share during a special pre-open session, compared to its previous close of ₹660.75, reflecting the price adjustment post the corporate restructuring.
The drop in share price is not due to any deterioration in fundamentals but rather a technical adjustment following the separation of the company’s commercial vehicle arm, Tata Motors Commercial Vehicles Limited (TMLCV).
Tata Motors had earlier fixed October 14, 2025, as the record date to determine eligible shareholders for the demerger. Under the approved scheme, each Tata Motors shareholder will receive one fully paid-up share of ₹2 in TMLCV for every share held in Tata Motors Limited (TML).
After the demerger, TML will continue as a listed entity but will now focus exclusively on the passenger vehicle and electric mobility businesses, including investments in Jaguar Land Rover (JLR). The company has been renamed Tata Motors Passenger Vehicles Limited (TMPV).
Meanwhile, TMLCV, which houses the commercial vehicle business, will operate as a separate company and will eventually be listed under the name Tata Motors Limited once all regulatory approvals are secured.
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In its regulatory filing, Tata Motors confirmed that the Ministry of Corporate Affairs (MCA) had issued a fresh certificate of incorporation dated October 13, 2025, reflecting the name change. The company is now coordinating with stock exchanges to update the new nomenclature in their records and websites.
The commercial vehicle division’s shares will remain non-tradable until the listing process is complete. Industry estimates suggest that listing and trading approvals typically take 45 to 60 days, with the TMLCV listing likely by mid-November.
The demerger aims to provide sharper strategic focus and operational independence to both businesses, aligning with Tata Motors’ long-term growth roadmap. Analysts believe the move could unlock shareholder value by allowing each vertical to pursue growth and capital allocation strategies suited to its distinct market dynamics.
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Shares of Tata Motors have been volatile in recent sessions, with investors closely tracking the progress of the demerger and potential re-rating post listing of TMLCV.
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Disclaimer: This post is for general informational purposes only. It does not constitute financial advice. Please consult a qualified professional before making financial decisions.
