Tata Motors has formally completed the demerger of its commercial and passenger vehicle divisions, marking a significant milestone in the company’s restructuring journey. The truck and bus business will now retain the historic name ‘Tata Motors Limited’, while the passenger vehicle unit has been renamed ‘Tata Motors Passenger Vehicles Limited’. The newly formed commercial vehicle company is expected to be listed separately on the BSE and NSE in November, allowing investors to trade directly in the new entity.
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Restructuring Effective from 1st October 2025
The demerger became effective from 1st October, with 14th October set as the record date to determine shareholder eligibility. Investors holding Tata Motors shares as of that date are entitled to receive one share of the new commercial vehicle company for every existing share, without any additional cost. According to the plan, these shares will be credited to eligible shareholders’ demat accounts within the next 30 to 45 days.
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Commercial Vehicle Arm Retains Tata Motors’ Legacy Name
In a strategic branding move, Tata Group decided that the legacy name ‘Tata Motors Limited’ would remain with the commercial vehicle (CV) business, which has been the company’s foundation since its inception. The passenger vehicle division, now operating as Tata Motors Passenger Vehicles Limited, will focus on cars, SUVs, electric vehicles, and JLR operations. The decision brings clarity to the company’s dual business identity and enables both divisions to pursue focused growth strategies.
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Market Reaction and Valuation
Following a special trading session on Tuesday, the commercial vehicle business was valued at approximately Rs. 260.75 per share. This figure was derived from the difference between Tata Motors’ pre-demerger closing price of Rs. 660.75 and the post-demerger opening price of Rs. 400 for the passenger vehicle business. Market analysts expect the move to unlock long-term value by giving investors greater visibility into each business’s performance.
Strategic Move Toward Focused Growth
Industry experts see the demerger as a landmark step that aligns with Tata Motors’ broader transformation agenda. By separating its commercial and passenger segments, the company aims to improve operational efficiency, attract targeted investments, and strengthen each unit’s leadership position. With the listing of the commercial vehicle arm scheduled for next month, the restructuring is expected to create a clearer growth path and sharpen Tata Motors’ competitive edge across both domestic and global markets.
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