Tata Motors shares to trade ex-CV business from today. What it means for shareholders

Tata Motors’ long-awaited demerger takes effect today, marking a pivotal restructuring for India’s largest vehicle manufacturer. October 14 has been set as the record date to determine eligible shareholders who will receive one share each in Tata Motors Passenger Vehicles (TMPV) and Tata Motors Commercial Vehicles (TMLCV).

The separation, which splits the automaker’s passenger and commercial vehicle businesses into two listed entities, comes at a time when the stock has lost momentum and investors are debating whether the move will unlock value or trigger more volatility.

Tata Motors shares have fallen for seven straight sessions, slipping 2.7% on Monday to Rs 660.90 and losing over 7% during the period. The stock is down nearly 11% so far in 2025, as investors weigh the demerger’s impact alongside the gradual restart of Jaguar Land Rover (JLR) production following a cyberattack.

The company said its Composite Scheme of Arrangement involving TMLCV and TMPV became effective from October 1, following approval from the National Company Law Tribunal’s Mumbai Bench. The reorganisation will create two separately listed entities — TMPV, which will house the passenger vehicle, electric vehicle, and Jaguar Land Rover (JLR) operations, and TMLCV, which will manage the domestic commercial vehicle business.

Tata Motors will be renamed Tata Motors Passenger Vehicles Ltd, while TMLCV will be renamed Tata Motors Ltd. Shareholders will receive one share of TMLCV for every Tata Motors share held, with the stock price adjusting on the ex-date to reflect the demerger.

“Investors are encouraged to avoid creating new leveraged positions in F&O or MTF until restrictions are lifted,” SAMCO Securities said, adding that trading activity is expected to normalise once the process concludes.

Brokerages outline post-demerger valuations

According to SBI Securities, the demerger enables clearer valuation of Tata Motors’ distinct businesses. For TMPV, which derives about 87% of its revenue from Jaguar Land Rover (JLR), the brokerage expects the stock to trade between Rs 285 and Rs 384 post demerger, adding that “any potential upside remains dependent on the recovery in JLR volumes and improvement in profitability.”

For the commercial vehicle business, SBI Securities projects TMLCV to trade between Rs 320 and Rs 470 post listing. It highlighted TMLCV’s planned €3.8 billion acquisition of Iveco Group NV’s commercial vehicle operations — a deal expected to triple combined revenues and expand global exposure in electric and alternative fuel powertrains. “The integration of Iveco Group NV, most likely in FY27, will expose the company to the global CV cycle,” the brokerage said, while cautioning about near-term margin dilution given Iveco’s lower EBIT margin profile.

YES Securities expects the demerger to “unlock value” for investors. “Fundamentally, pure-play CV and PV verticals will be available for investors to play auto cycles, which currently are aggregated into one. We think it is a good value-unlocking opportunity,” the brokerage said.

Bonanza’s Research Analyst Khushi Mistry said the separation “will lead to sharper business focus for both entities.” She noted that TMLCV enters the market as India’s largest commercial vehicle maker with a 37.1% share and a 12.2% EBITDA margin in Q1FY26, despite a revenue decline. TMPV, she added, “is expected to grow 8–10% in H2FY26, aided by new launches, strong SUV positioning, and rising EV and CNG demand, which together account for 45% of its PV segment revenue.”

JLR recovery to influence sentiment

Tata Motors’ UK-based subsidiary Jaguar Land Rover began a phased restart of manufacturing on October 8 after a cyberattack in early September disrupted global operations. Mistry said the attack led to a 24% drop in wholesale volumes and a 17% decline in retail sales during the September quarter, with losses estimated at £50 million per week. “Full production is expected to resume post-Christmas due to the scale of restoration needed,” she said.

YES Securities added that “2QFY26 JLR dispatches (-24% YoY and QoQ) witnessed production loss due to the cyberattack since early September 2025. However, the retail-level impact was much lower. We expect volumes to gradually improve in 3Q and 4Q, which should support sentiment.”

Implications for shareholders

For investors, the demerger offers a clearer choice between the globally exposed, cyclical passenger vehicle business of TMPV and the domestically focused commercial vehicle operations of TMLCV. The cost of acquisition for both entities will be communicated by Tata Motors in due course, relevant for portfolio rebalancing and tax adjustments.

While short-term volatility is likely as the stock adjusts to the new structure, analysts say the long-term outlook hinges on JLR’s production recovery and the commercial vehicle segment’s performance following the Iveco acquisition.

For now, investors are watching whether the split reignites momentum in the stock – or whether the road to value creation will take longer to accelerate.

Also read | TCS, Tata Motors tumble up to 42% from peak, with over Rs 4 lakh crore wiped off Tata stocks in 2025 amid boardroom turmoil

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