TrendingPitara.com | June 15, 2025
Tata Motors shares sank 40% across the country in early trade Tuesday, opening Rs 399 on the Bombay Stock Exchange against Monday’s close of Rs 660.90. The stock opened for trading at its ex-demerger price following separation of its commercial vehicles business into a separately listed company. The fall is due to the removal of its commercial vehicle business from the market valuation of the parent.
The 14th of October marks the historic date for the automaker’s eagerly awaiting division into Tata Motors Passenger Vehicles Ltd and Tata Motors Commercial Vehicles Ltd. Shareholders holding shares on or before October 13 will receive one share of TMLCV for every Tata Motors share held. Regular trading for the stock is set to resume at 10:00 AM on Tuesday.
The main company will no longer mention the commercial vehicles arm in its trading as of today, which explains the stock’s hypothetical fall. Tata Motors will be called Tata Motors Passenger Vehicles Ltd (TMPV), which will include operations for Jaguar Land Rover (JLR), electric vehicles, and passenger cars. Within 30 to 45 days, TMLCV shares will be credited to demat accounts. Following regulatory clearances, the new company will list separately on the NSE and BSE.
Each current F&O contracts that expire in October, November, and December were resolved on Monday, and starting today, they will be reintroduced with updated lot sizes.
After the merger value brokerages:
Brokerages anticipate that the demerger will improve corporate focus and clarify valuations.
The division “enables clearer valuation of the company’s distinct businesses,” according to SBI Securities. After the demerger, TMPV—which receives 87% of its revenue from JLR—is anticipated to trade between Rs 285 and Rs 384, with possible growth dependent on JLR’s profitability and volume recovery.
SBI Securities projected a range of Rs 320–470 for TMLCV, citing its proposed €3.8 billion acquisition of Iveco Group NV’s commercial vehicle assets, which is anticipated to increase exposure in electric and alternative fuel powertrains and triple combined sales. The brokerage noted near-term margin dilution because of Iveco’s weaker EBIT margin and stated that “the integration of Iveco Group NV, most likely in FY27, will expose the company to the global CV cycle.”
Separating passenger and commercial vehicle companies will enable investors to target different auto cycles, according to YES Securities, which characterized the demerger as a “value unlocking opportunity.”
According to Khushi Mistry, a research analyst at Bonanza, the split “will lead to sharper business focus for both entities.” Despite a drop in sales, TMLCV enters the market as the biggest manufacturer of commercial vehicles in India, with a 37.1% market share and 12.2% EBITDA margin in Q1FY26. With new launches, a solid SUV positioning, and growing demand for EVs and CNG, which account for 45% of its passenger vehicle revenue, TMPV is predicted to expand by 8–10% in H2FY26.
JLR’s recovery will impact sentiment
After a cyberattack that disrupted worldwide operations in early September, Jaguar Land Rover (JLR), a UK-based subsidiary of Tata Motors, started a phased manufacturing restart on October 8. According to Khushi Mistry, the incident resulted in a 17% decrease in retail sales and a 24% drop in wholesale volumes for the September quarter, with an estimated weekly loss of £50 million. Because to the extent of the restoration required, full production is anticipated to restart after Christmas, she continued.
“2QFY26 JLR dispatches (-24% YoY and QoQ) were impacted by production losses due to the cyberattack from early Sep’25,” according to YES Securities. The impact at the retail level, however, was substantially smaller. In the third and fourth quarters, we anticipate volumes to progressively improve, which should boost sentiment.
Consequences for shareholders
For each share of Tata Motors held, shareholders will receive one share in TMLCV. For portfolio and tax adjustments, the acquisition costs for both firms will be disclosed subsequently.
As the stock gets used to the new structure, short-term volatility is anticipated. According to analysts, JLR’s production rebound and TMLCV’s performance following Iveco merger will determine the longer-term picture.
Investors are currently keeping an eye on whether the demerger will boost Tata Motors’ stock price or if value creation will take some time to manifest.
