The move has already impacted the stock, which is down nearly 5% ahead of the record date.
Backed by the Tata Group, Tata Motors is preparing to split its operations into two distinct companies. According to a regulatory filing, the demerger scheme became effective on October 1, 2025, with the appointed date set for July 1, 2025.
The passenger vehicle business, including stakes in EVs and Jaguar Land Rover (JLR), will remain under Tata Motors Limited, which will be renamed Tata Motors Passenger Vehicles Limited. The commercial vehicles business, now called TML Commercial Vehicles, will be renamed Tata Motors.
Shareholders on record as of October 14 will receive 1 share of TMLCV for every 1 share held in Tata Motors, both with a face value of ₹2.
Post-demerger, Tata Motors' share price will be adjusted via stock exchange price discovery mechanisms. Shares of TMLCV will be allotted to eligible shareholders and listed on BSE and NSE following regulatory approvals, a process expected to take 45-60 days.
However, from the date of allotment until official listing, TMLCV shares will not be tradeable, creating a temporary illiquidity window.
The company is also transferring ₹2,300 crore worth of non-convertible debentures (NCDs) to TMLCV, with eligible holders already identified. Analyst sentiment remains cautious. Out of 27 analysts tracked by Trendlyne, 12 rate the stock a Buy or Strong Buy, with an average target price of ₹762, suggesting 12% upside.
As of market close, Tata Motors shares ended at ₹679.05 on BSE, down for a sixth consecutive session. The stock is trading below its 52-week high of ₹943.95 and holds a market cap of ₹2.5 lakh crore.