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Tata Motors Demerger: Carmaker’s Shares Jump 4% After Price Discovery; Here’s What Analysts Say
Tata Motors shares kicked off the week on a high note, jumping nearly 4% on October 14 after a much-awaited price discovery session following the company’s demerger of its commercial vehicle (CV) business.
The stock opened at ₹400 per share and climbed to ₹415.80 by 11:10 am, reflecting positive investor sentiment after the long-anticipated split. The move marks a new chapter for one of India’s most trusted automakers.
What Is the Tata Motors Demerger?
Earlier this month, Tata Motors fixed October 14 as the record date to determine shareholders eligible for receiving shares of its newly formed TML Commercial Vehicles Ltd (TMLCV).
Investors holding Tata Motors shares as of this record date will receive one share of TMLCV for every one share of Tata Motors they own. The shares of this new commercial vehicles entity are expected to begin trading on the BSE and NSE by mid-November.
This restructuring officially became effective from October 1, but its impact was felt in today’s trading session as the market adjusted to the demerger.
Why Tata Motors Went for Demerger
In August last year, Tata Motors’ board approved the separation of its commercial and passenger vehicle (PV) divisions into two distinct listed companies.
The idea behind this move is simple – to sharpen focus and unlock the potential of each business. The PV arm will be renamed Tata Motors Passenger Vehicles Ltd (TMPVL), while the CV business will be listed as Tata Motors (TML) once trading begins in November.
This 1:1 demerger creates two focused giants:
- Tata Motors Commercial Vehicles (TMLCV)
- Tata Motors Passenger Vehicles (TMPV)
This structure allows both divisions to pursue independent strategies, attract investors suited to their growth model, and accelerate innovation – especially in electric and premium segments.
Analysts React: What the Market Experts Are Saying
Nomura’s Take
Global brokerage Nomura values the commercial vehicles unit at ₹365 per share and the passenger vehicles entity at ₹367 per share.
“The premiumization trend remains strong, with rising bookings for models like Punch and Nexon,” Nomura said, noting that the PV business has gained fresh momentum after GST reforms and festive demand.
Goldman Sachs’ View
According to Goldman Sachs, the consolidated Tata Motors is valued at ₹700 per share, which includes:
- ₹236 for JLR (Jaguar Land Rover)
- ₹130 for the Passenger Vehicle (India) business
- ₹306 for Commercial Vehicles
- ₹26 for its stake in Tata Technologies
The firm believes the demerger will help investors better understand each division’s performance and drive more transparent valuations.
Nuvama’s Estimate
Brokerage Nuvama expects the CV business to be listed within 30–45 days. It values the passenger vehicle division at ₹410 per share, including ₹188 for JLR and ₹33 for Tata Technologies.
This valuation also factors in a 20% holding company discount, implying a conservative but bullish long-term outlook for both divisions.
Tata Motors Share Adjustment Explained
During the pre-open session, Tata Motors shares were discovered at ₹400, which reflected a 39.5% decline (₹260.75 per share) from the previous close. This drop was merely a technical adjustment – not a loss in value – to account for the demerger of the commercial business.
Tata Motors confirmed:
“Shareholders as on October 14 will receive one fully paid-up share in TMLCV for every Tata Motors share held.”
The company emphasized that TML (the passenger business) will continue as a listed entity under the new name Tata Motors Passenger Vehicles Ltd, while TMLCV will take over as Tata Motors Ltd for commercial operations.
When Will TMLCV Shares Be Listed?
While there’s no official listing date yet, Tata Motors has said that the TMLCV listing process usually takes 45–60 days after submitting approvals to exchanges. Investors can expect the new shares to be available for trading by mid-November 2025.
Until then, these shares will remain non-tradable, a standard procedure during corporate demergers.
Why Tata Motors Share Is Falling Today
Some investors noticed a technical dip in Tata Motors’ stock post-demerger, sparking confusion. The fall is not due to poor performance, but rather a mathematical adjustment in share value.
When a company splits into two entities, the market capitalisation remains largely the same – it’s just divided between the two. So, while the stock price of Tata Motors Passenger Vehicles fell temporarily, shareholders have received an equal number of shares in TMLCV, maintaining their overall portfolio value.
In simpler terms, it’s like cutting a cake into two slices – each smaller, but together still the same cake.
Analyst Outlook: A Positive Long-Term Story
Market watchers see this demerger as a strategic and futuristic move. With India’s auto industry heading into an EV-driven, tech-powered future, separating the businesses helps both arms chase their own ambitions – electric and premium cars for TMPV, and next-gen heavy-duty innovation for TMLCV.
According to the Upstox expert analysis this restructuring also aligns Tata Motors with global best practices seen in companies like Volvo and Daimler, who separated passenger and truck divisions to achieve sharper operational focus.
Final Take
The Tata Motors demerger isn’t just a business restructuring – it’s the start of a more transparent and growth-focused era for the brand. Investors now get to watch two powerhouse entities evolve independently, each with its own story to tell.
As a long-time follower of India’s auto space, I believe this demerger will unlock long-term value, improve governance, and attract fresh investor confidence – especially in the booming EV market.
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Disclaimer: The views and recommendations above are those of individual analysts or brokerage companies, not US News Weeks. We advise investors to check with certified experts before making any investment decisions.
Source : Moneycontrol & Upstox - Tata Motors Demerger
✍️ Written by Nikhil Singh
Market & IPO Analyst | Business News Writer | Tech-Auto Observer
Nikhil has been tracking Indian IPOs, consumer brands, tech & automobile overview and financial trends since 2019. His writing style blends market insight with a relatable human voice — making complex data simple for everyday investors.
