Tata Motors, the automobile giant of Tata Group, is going to be in focus this week as its demerger record date in 1:1 ratio is nearing.
The heavyweight auto company is going to split into two listed entities. Ahead of the split, the company rewarded its employees with 4,79,746 performance shares units which are incentives for contributions. A total of 12 analysts have currently recommended BUY and Strong BUY on Tata Motors. While overall outlook is HOLD.
Tata Motors Share Price: 
After market hours of September 29, Tata Motors share price closed at Rs 672.50 per share on BSE, broadly flat with market cap of Rs 2,47,632.97 crore. In past five sessions, the auto stock has dropped nearly 5% ahead of its demerger. While year-to-date, the stock is down by over 10.2% on BSE.
Tata Motors Performance Shares Units:
During the weekend, Tata Motors announced that the Nomination and Remuneration Committee has approved the grant of the 2nd tranche comprising 4,79,746 Performance Share Units in aggregate, to the Eligible Employees of the Company and its subsidiaries, under the Scheme.
What Are Performnce Share Units?
Performance Share Units (PSUs) are a type of equity-based compensation awarded to employees, typically executives, that are tied to specific performance goals or milestones. Unlike stock options or restricted stock units (RSUs), PSUs are tied to performance: employees only receive shares if the company hits predefined goals, ranging from financial metrics (e.g., earnings per share) to operational targets (e.g., product launch timelines), or market-based indicators (e.g., total shareholder return relative to peers), as per Optio Incentives explainer.
Tata Motors Demerger Record Date:
The company is going to demerge its business into two listed entities in due course. One will be focused on commercial vehicles (CV) and the other will emphasise the passenger and JLR cars segment.
In its latest filing, Tata Motors said the final hearing for the scheme of demerger has been concluded today by NCLT and the order is reserved; we aim to complete it this quarter, with 01st October being the Effective Date.
As part of the demerger plan, Tata Motors shareholders will get 1 share of TMLCV with a face value of Rs 2 each for every 1 share held in the company. This makes the business split ratio 1:1.
Post demerger, the share price of Tata Motors will be adjusted.
Buy Tata Motors Shares?
The consensus recommendation from 27 analysts for Tata Motors Ltd. is HOLD, as per Trendlyne data. However, from the total, 7 analysts have recommended STRONG BUY and 5 analysts have suggested BUY on Tata Motors. In total, 12 analysts are recommending buying. The average target price on Tata Motors is set at Rs 764.59 apiece, signalling nearly 14% potential upside ahead.
According to GEOJIT analysts note, the upcoming demerger of its CV and PV businesses is likely to unlock operational focus and longterm value, alongside benefit from the Iveco acquisition. Additionally, JLR’s UK-US and EU-US trade deal lowering tariff is expected to strengthen competitiveness and market access. Therefore, they retained their HOLD rating on the stock with a revised target price of Rs. 734 based on SOTP valuation.