Tata Motors demerger to take effect on October 1

NEW DELHI — Tata Motors Limited has announced that its demerger into separate commercial vehicle and passenger vehicle businesses will take effect on October 1.

The move comes after receiving approvals from its board, regulators, and the National Company Law Tribunal.

As part of the demerger, shareholders will receive one share in the new commercial vehicle company for each fully paid Tata Motors share held on the record date, the company said in a filing to the exchanges.

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The record date is pending announcement and will be revealed after the completion of statutory filings. Upon confirmation of the record date, investors will receive one share in the CV and PV companies for each Tata Motors share they own.

Shares will be automatically credited to investors' demat accounts, with voting rights remaining proportionate across both entities. Both companies will set their own dividend policies moving forward.

As part of the demerger, Tata Motors will split into two separate listed entities. The commercial vehicle business arm housed in TML Commercial Vehicles Ltd. (TMLCV) is expected to be renamed to Tata Motors Limited once the demerger is complete.

Tata Motors will rename its existing listed company to Tata Motors Passenger Vehicles Ltd., retaining its passenger vehicle and electric vehicle businesses, as well as investments like Jaguar Land Rover.

Girish Wagh, who currently heads Tata Motors' CV operations, will lead the new commercial vehicle company, while Shailesh Chandra, the current head of the passenger vehicle and electric vehicle divisions, will spearhead the PV-focused company.

Tata Motors announced that the demerger aims to unlock value and enhance corporate efficiency, highlighting the distinct market dynamics, opportunities, and capital requirements of its CV and PV businesses.