Following the demerger, Tata Motors' stock falls 40%. Find out the reasons behind the decline, the benefits for investors, and the listing date for Tata Motors Commercial Vehicles.
Concerning: Tata Motors' stock opens at ₹399, Company currently valued at ₹1.45 lakh crore
Tuesday saw a steep decline in the value of Tata Motors' shares, which fell by almost 40%. This sharp drop occurred immediately following the company's separation of its passenger vehicle (PV) and commercial vehicle (CV) businesses.
The company's market capitalization dropped to roughly ₹1.45 lakh crore on Tuesday(14th Oct) after the stock opened at ₹399, down nearly 40% from Monday's closing price of ₹660.90.
Highlights
Due to a business demerger rather than panic selling, Tata Motors' stock opened 40% lower.
- Equal shares in two businesses Passenger Vehicles and Commercial Vehicles will be distributed to investors.
- By mid-November 2025, a new listing of TMLCV is anticipated.
- Technical in nature, the price decline does not indicate subpar performance.
Timeline
Tata Motors plans to split the CV business in June 2025
Complete timeline:
| Date | Event |
|---|---|
| June 2025 | Tata Motors announced plan to demerge its CV business |
| Sept 2025 | Regulatory and court approvals received |
| Oct 14, 2025 | Record date for identifying eligible shareholders |
| Oct 15, 2025 | Stock opened 40% lower due to price adjustment |
| Mid-Nov 2025 | Expected listing of TMLCV on stock exchanges |
The Reasons Behind Tata Motor's Business Separations
To enable a more focused attention on the passenger versus commercial segments.
To draw in investors who are interested in particular industries (EV vs. CV growth stories).
To bring value to every company, particularly when it comes to EV expansion.
What's the Change?: Before & After Demerger
| Particulars | Before Demerger | After Demerger |
|---|---|---|
| Company Name | Tata Motors Ltd. | TMPVL + TMLCV |
| Share Price | ₹660.90 | ₹399 (TMPVL) + TMLCV (to be listed) |
| Business Segments | Passenger + Commercial | Split into two companies |
| Valuation | ₹2.4 lakh crore | ~₹1.45 lakh crore (TMPVL) |
What Caused the Drop in Tata Motors Shares?
The company claims that a technical adjustment made after its commercial vehicle business was split up was the cause of this fall.
According to the demerger plan, investors who held Tata Motors shares as of October 14, 2025, will receive one share of Tata Motors Commercial Vehicles Limited (TMLCV). The split between the two separate companies is reflected in the share price decline rather than a decline in investor value.
According to Upstox, Tata Motors explained in its statement:
“The company has fixed Tuesday, October 14, 2025, as the ‘record date’ to identify eligible shareholders who will receive one fully paid-up share of Tata Motors Commercial Vehicles Limited (TMLCV) of ₹2 face value for every one fully paid-up share of Tata Motors Limited (TML) of ₹2 face value held on that date, as per the approved demerger plan.”
TMPVL or Tata Motors Passenger Vehicles Limited
Tata Motors Passenger Vehicles Limited (TMPVL) will remain listed under this new name following the demerger. This organization will oversee the Jaguar Land Rover (JLR) and passenger car businesses as well as EVs. After obtaining regulatory approvals, the recently established TMLCV will be renamed Tata Motors Limited.
Until stock exchanges approve listing, which usually takes 45 to 60 days, TMLCV shares will not be traded. New contracts for TMPVL started trading on Tuesday, while Tata Motors' previous derivative contracts (F&O) expired on Monday. It won't be accessible for F&O trading right away, though.
Implications for Investors
After listing, your total value essentially remains unchanged, so there is no real loss. Soon, you will have two separate Tata businesses, each concentrating on its own strengths. When TMLCV shares are listed, which is probably going to happen in November, they will show up in your demat. Experts refer to this as a technical price correction, so avoid panic selling.
Investors Do Not Need to Panic. The following allocation will be made to investors who held shares until the record date:
- One hundred shares of Tata Motors Passenger Vehicles Limited, which was formerly known as Tata Motors.
- One hundred shares of the recently listed Tata Motors Commercial Vehicles Limited According to media reports.
- TMLCV shares should go public in four to six weeks, most likely by the middle of November.
In conclusion, the steep decline in Tata Motors' stock is a technical adjustment brought on by the demerger rather than a true decline in investor wealth. Equivalent shares in the passenger and commercial vehicle companies will soon be distributed to shareholders.
