Tata Motors demerger gets board approval, CV business to be listed as separate entity in 15 months

Tata Motors informed the exchanges that once the scheme comes into effect, it will result in the creation of two listed companies with mirror shareholding. The demerger would result in two separate listed entities with one housing the commercial vehicle business and the other amalgamated company housing the passenger vehicle business, including PV, EV, JLR and related investments.

“As a part of the scheme, TML will demerge its Commercial Vehicle undertaking involving the Commercial Vehicle business (all the assets, liabilities and employees relating to the Commercial vehicle business) and all its related investments into TMLCV,” the Tata Group company said in a release.

The company's passenger vehicle arm, Tata Motors Passenger Vehicles Limited (TMPV), will be merged with Tata Motors Ltd. The amalgamated company will be renamed as Tata Motors Passenger Vehicles Limited (TMPV).

The demerger process is expected to be completed within 12-15 months. During this period, the company will obtain approvals from the National Company Law Appellate Tribunal (NCLT), shareholders of TML and TMPV, SEBI, Stock Exchanges, and creditors.

The demerger will be implemented through an NCLT scheme of arrangement, and all Tata Motors shareholders will continue to have identical shareholdings in both listed entities.

The demerger of TMLCV followed by merger of TMPV will happen simultaneously, on the “Appointed date”. Tata Motors said that the indicative appointed date is July 01, 2025. The asset ratio, as on the appointed date, is expected to be 60:40.

Tata Motors also released its Q1 results on Thursday. The company’s consolidated revenue from operations for the June quarter for Q1FY25 surged over 5% to ₹1,08,048 crore compared to ₹1,02,236 crore in Q1FY24. Its consolidated net profit increased 72.43% year-on-year to ₹5,692 crore in Q1FY25 compared to ₹3,301 crore in the year-ago quarter.

The automaker posted a 6% growth in its earnings before interest, taxes, depreciation, and amortisation (EBITDA) to ₹15,568 crore in Q1FY24, compared to ₹14,681 crore in Q1FY24. However, its EBITDA margin remained flat at 14.4% in Q1FY25 compared to the corresponding quarter of the preceding fiscal year.

Tata Motors shares closed at ₹1,142 apiece, down 1.21%, on the NSE.