Tata Motors Demerger: All You Need to Know?

With shareholder approval secured, the spotlight now shifts to the finer details of Tata Motors’ much-anticipated demerger. The market participants are eager to understand the share allocation ratio and what it means for their current holdings. Here’s a comprehensive breakdown of what you should know

When Will the Tata Demerger Take Place?

Although the proposal has been greenlit, the actual separation is still a while away. Tata Motors aims to complete the demerger by the third quarter of FY26. This timeline gives the company over a year to execute a smooth split and list the new entities separately on the stock exchanges.

Shareholders Gave Approval for Demerger

In a rare display of overwhelming consensus, Tata Motors' shareholders have strongly backed the demerger plan. An extraordinary 99.9995% of votes were in favour, with only around 13,700 dissenting votes out of more than 2.73 billion shares. It's one of the most decisive approvals seen in Indian corporate history.

Also Read: Tata Motors Shareholders to Vote Tomorrow, May 6 on Demerger to Spin off PV, EV, JLR Into New Listed Entity

What Will Change After Tata Motors Demerger?

Tata Motors will transform into two independently listed companies:

• Passenger Vehicles (PV) business – includes Electric Vehicles (EVs) and the luxury Jaguar Land Rover (JLR) brand.
• Commercial Vehicles (CV) business – includes trucks, buses, and other heavy vehicles.

Under the demerger plan, existing shareholders will receive 1 share of the new CV entity (TMLCV) for every 1 share held in Tata Motors (TML). Both shares will carry a face value of ₹2.

Market Reacts to the News

Investors are already responding. Tata Motors’ stock surged 9% in just two days following the announcement and has climbed 16% over the past month. However, the stock still has ground to recover—down 15% over the last six months and 32% year-on-year.

What’s Next: Q4 Results & Dividend

Investors are now eyeing May 13, when Tata Motors will release its Q4 earnings. The board is also expected to deliberate on a potential dividend for FY25, making it a crucial checkpoint for assessing the company’s health ahead of the demerger.

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