tata motors share demerger
Tata Motors Share Demerger: Monday morning was a bit surprising for Tata Motors investors. As soon as the stock market opened, the company’s stock fell directly from ₹ 660.90 to ₹ 399. This is a huge decline of about 40%. But if you are a shareholder of Tata Motors, then there is no need to panic. Actually, this decline is not a sign of economic crisis, but is the result of demerger done under a pre-announced plan of the company.
What is Demerger and why is it affected?
Tata Motors has divided its two major businesses commercial vehicles and passenger vehicles into separate companies. Till now the share of Tata Motors reflected the combined value of these two businesses. But now the company has transferred its commercial vehicles unit to a separate company TML Commercial Vehicles Ltd (TMLCV).
This means that the current Tata Motors stock now reflects the value of only the passenger vehicles business (such as Nexon, Harrier, Punch etc.). Therefore, the decline in the share price reflects the value of this share only and not the loss of the entire company.
How will the new shares be received and who will be eligible?
Tata Motors has set the record date as 14 October 2025. This means that those who are holding shares of Tata Motors till October 14, will also get one share of TMLCV for every share they hold. It is just like your capital is divided into two parts, one in passenger vehicle and one in commercial vehicle business. Trading of TMLCV shares is likely to begin on BSE and NSE in November 2025.
Will the fall in shares not affect the portfolio?
When the market opened and Tata Motors shares fell, many investors got scared after seeing this. But in reality the value of your total investment has not changed much. For example, if earlier you had a share of Tata Motors worth ₹660, now it is seen around ₹400. But at the same time, you will also get one share of the new TMLCV, whose value can be around ₹ 260.