Tata Motors has set October 14, 2025, as the record date for the demerger of its Commercial Vehicle (CV) business. Investors will receive 1 share of the new company, TMLCV, for every 1 share held. This scheme, implemented after NCLT approval, will allow the company to focus separately on its passenger and CV businesses, leading to long-term value creation for investors.
Tata Motors CV demerger: The country's leading auto company, Tata Motors, has officially announced October 14, 2025, as the record date for the demerger of its Commercial Vehicle business. On this date, investors holding shares of the company will receive shares of the new company, TML Commercial Vehicles Ltd (TMLCV), in an equivalent ratio. This move is part of Tata Motors' large-scale restructuring plan, which will increase the company's focus on its passenger and CV segments and provide long-term benefits to investors.
How Shareholders Will Benefit
Tata Motors has clarified that its shareholders will receive 1 share of TMLCV for every 1 share held. The face value of both shares has been set at ₹2. This means if investors hold 100 shares, they will receive the same number of shares in the new company. This way, the shareholding pattern will be completely mirrored, and investors' stakes will remain intact.
Part of the Company's Major Restructuring
This demerger is part of the company's comprehensive restructuring strategy. Under this, Tata Motors has divided its business into three parts:
Tata Motors Limited (the primary company after the demerger).
TMLCV, which is the new company being created.
Tata Motors Passenger Vehicles Ltd (TMPV), which has now been merged.
This scheme has received approval from the Mumbai bench of the National Company Law Tribunal (NCLT) and came into effect from October 1, 2025.
Record Date for Debenture Holders Too
The company has also announced a record date for debenture holders. On October 10, 2025, it will be determined which Non-Convertible Debenture (NCD) holders will be transferred to the new company TMLCV. This clearly indicates that the company is involving not only equity investors but also debenture investors in this process.
Where Will the New Company Be Listed?
Tata Motors has informed that TMLCV shares will be listed on both BSE and NSE exchanges. The company plans for the new company to begin trading on the stock market by early November 2025, provided all procedures are completed on time. There is already excitement in the market regarding this.
Significance of Demerger from Investors' Perspective
Brokerage houses believe this decision is a significant milestone for Tata Motors. A JM Financial report states that after the demerger, the passenger and commercial vehicle businesses will receive separate valuations. However, experts suggest that initial volatility in shares might be observed as the market will now evaluate both businesses from different perspectives.
Strong Stock Rally in the Market
Following the demerger announcement, investor enthusiasm was clearly visible in the stock market. On Friday, Tata Motors' shares on the BSE closed up by approximately 4 percent at ₹707.70. Investors believe that after the demerger, the company will have the opportunity to focus more on its distinct businesses. Separate management for both passenger and commercial vehicle segments could also lead to increased competition and innovation.
A New Chapter for the Company
This step by Tata Motors will mark a new chapter in the company's history. This decision is also considered far-reaching in the industry. The company believes that this process will make it easier to focus on both the passenger vehicle and commercial vehicle businesses, leading to better long-term value for investors.
