Tata Motors Share Price Fell ~2% Ahead of Demerger Vote Meeting

On May 6, Tata Motors’ shares price witnessed a negative reaction from the investors as the company’s shareholders convene virtually to vote on the proposal to demerge its business into two distinct entities. Tata Motors share price fell ~2%, reaching a day low of ₹650.85 at 12:35 PM after opening at ₹658.70 on BSE. This decline comes as shareholders prepare to vote on the proposal to split the company into two separate entities for Passenger Vehicles and Commercial Vehicles.

Tata Motors Demerger

After the Tata Motors demerger, there will be two new entities, one focused on Passenger Vehicles and the other on Commercial Vehicles. The two new entities will be named Tata Motors Light Commercial Vehicles (TMLCV) and Tata Motors Light Passenger Vehicles (TMLPV).

The Passenger Vehicles segment will include internal combustion engine (ICE) vehicles, electric vehicles, and Jaguar Land Rover (JLR) operations.

Tata Motors Virtual Meeting

The virtual meeting is scheduled for 3 PM today, and should shareholders approve the resolution, they will be entitled to receive 1 share of the newly formed Commercial Vehicles entity for the 2 shares they currently hold. Only those who held shares of Tata Motors as of March 28, 2025, will be eligible to participate in the meeting.

The company had announced the meeting last month, with the official notification on April 4 stating that it would be conducted via video conferencing (VC) and other audio-visual means (OAVM). Tata Motors had set March 28 as the cut-off date for the demerger, meaning shareholders who acquired shares after this date will not be eligible to vote on the proposal.

Tata Motors Demerger Background

In March 2024, Tata Motors’ board of directors approved the demerger of the company into two listed entities: one for its commercial vehicle operations and the other for its passenger vehicle business, including electric vehicles, JLR, and related investments. The commercial vehicle division will be spun off into Tata Motors Commercial Vehicles Limited (TMLCV), while the existing Passenger Vehicles business will merge into Tata Motors Limited (TML), the current listed entity.

Also Read: Tata Motors Share Price Surges After Jaguar Land Rover Restarts Exports to the US

Tata Motors Chairman N. Chandrasekaran commented on the demerger, saying, “Tata Motors has achieved a strong turnaround in recent years. Our three automotive divisions are now operating independently and delivering consistent results. This demerger will allow each business to capitalise more effectively on market opportunities, improving focus and agility. It will result in better growth prospects for our employees, a superior experience for our customers, and increased value for our shareholders.”

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