“This article expresses my personal analysis based on publicly available financial data and market reports.”
Did Tata Motors Shares crash 40% overnight?
It looked like a market meltdown – Tata Motors shares fell nearly 40% in a single session. Fear, shock, uncertainty rippled across investor circles. But here’s the twist: this plunge isn’t some catastrophic failure. It’s a mechanical adjustment tied to the company’s demerger of its commercial vehicle (CV) business. Once you peel back the noise, the fall doesn’t look so scary.
What exactly happened?
On October 14, 2025, Tata Motors shares opened around ₹399 on BSE, down from the prior close near ₹660. That’s the day it began trading ex-demerger, meaning the value of its commercial vehicle arm was carved out.
The scheme: for every Tata Motors share a holder owns, they will receive one share of the new CV company (TML Commercial Vehicles Ltd). So the parent stock now reflects only the passenger vehicle + Jaguar Land Rover + EV/CNG side. The “plunge” simply reflects that carved-out valuation.
Why you should ignore the 40% plunge
1. It’s accounting – not sudden destruction
When a business unit is spun off, the related value is removed from the parent company’s share price. This is textbook corporate finance, not panic. Analysts flagged this earlier, saying the drop is “notional.”
2. You’ll own both pieces
Since shareholders get 1:1 shares of the new CV entity, your total holding isn’t diminished – it’s just transformed. Imagine your single “Tata Motors” box splits into two boxes. The sum of box A + box B should approximate the old box’s value (discounts and market sentiment aside).
3. Potential for value unlocking
Analysts are upbeat. A split allows each business (CV vs PV) to pursue strategies suited to its industry. For example, the CV arm can lean heavily on infrastructure demand, logistics, and fleet upgrades – areas that often have different cycles than passenger vehicles.
The real risks and things to watch
JLR recovery is crucial
The Tata Motors passenger side includes Jaguar Land Rover (JLR). That unit has been through turbulence – e.g., cyberattacks and supply chain woes. If JLR struggles, it drags the new parent company.
Volatility will persist near ex-date
According to the Moneycontrol price swings are expected around the demerger event. Traders may overreact. Some recommend holding off on fresh entries till the dust settles.
Market sentiment and multiple compression
Even with rational mechanics, markets may discount one unit more than the other. If investors distrust CV businesses or fear macro headwinds in manufacturing, that leg might get punished. On the flip side, the passenger/EV side may attract growth premiums – or fears if interest rates bite.
A real-world parallel
One analogy: think of a property where you separate the lands – say, a shop and a residence. On the demerger day, the “combined property” listing may drop because its residential portion is now sold separately. But the owner still holds both properties. It’s not a collapse in worth – just a reallocation.
In 2025, corporates are doing this more: auto groups, tech firms, steel giants. Having focused hands managing each vertical tends to be rewarded in capital markets.
My take: Don’t fear, but be selective
Personally, I see this 40 % drop scare as largely overblown by headline seekers. Yes, there is risk. Yes, sentiment matters. But for a patient investor, this is an opportunity to own two pure plays (CV + PV) rather than a mixed one.
I’d hold if I was already in. And maybe nibble after the first few weeks of post-demerger stability. But I wouldn’t jump in right at the opening bell.
Conclusion: headline fear vs reality
That dramatic 40 % plunge? It was mostly a bookkeeping move tied to Tata Motors’ demerger of its CV business. If you hold shares, you’ll simply receive the new CV shares. Your total value may not change much – barring market quirks.
In 2025, smart investing is about recognizing noise vs signal. As Tata Motors reboots into two entities, patience and clarity will serve better than panic. I’d bet there’s upside in both halves – if you stay calm.
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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 & The Economic Times – Tat Motors Shares Fall
✍️ 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.
