Monday, September 29, 2025
By Kamal Swami
Tata Motors All Set To Demerge On October 1, 2025
Tata Motors Ltd. has confirmed that its long-awaited plan of demerger into separate commercial vehicle (CV) and passenger vehicle (PV) businesses will take effect from October 1, 2025. The approval regarding this merger was passed by the board and regulatory authorities, including the National Company Law Tribunal (NCLT). As part of the corporate restructuring, shareholders will receive one share in the new commercial vehicle company for every fully paid Tata Motors share held on the record date. The record date is yet to be announced and will be shared after completion of statutory filings.
Two Distinct Entities
After the demerger, Tata Motors will operate as two separate listed entities. The commercial vehicle division, currently a part of TML Commercial Vehicles Ltd. (TMLCV), is expected to be renamed as Tata Motors Limited after the split. Similarly, Tata Motors Ltd., retaining the passenger vehicle business—including electric vehicles and investments such as Jaguar Land Rover—will be renamed Tata Motors Passenger Vehicles Ltd.
The demerger will not be limited to only two different identities but will also demerge the leadership of both the upcoming alliances. According to reports, Girish Wagh, currently heading Tata Motors’ commercial vehicle operations, will lead the new CV company, while Shailesh Chandra, who manages the operations of the passenger vehicle and electric vehicle divisions, will head the PV-focused company.
Rationale Behind the Demerger
According to the sources of Tata Motors, the main reason behind the demerger is corporate efficiency and value unlocking. With both commercial and passenger vehicle businesses having different capital needs and growth opportunities, operating as independent entities is expected to make each business more agile and effective. The plan for the demerger was made for the first time in 2024. The appointed date for accounting and valuation purposes is July 1, 2025, while October 1 marks the legal effective date.
What Shareholders Can Expect
Once the record date is announced, shareholders will receive shares in a 1:1 ratio for each Tata Motors share held. Shares of the CV company will be credited automatically to investors’ demat accounts following the corporate action. Voting rights will remain proportionate across the two companies, and each entity will decide its own dividend policy.
