Tata Motors demerger on Oct 1: Here’s all you need to know, from leadership to record date

As a part of the demerger plan, the automobile company had set the share entitlement ratio at 1:1, which means a Tata Motors shareholder will receive one fully paid-up share of ₹2 in Tata Motors Commercial Vehicles Limited (TMLCV) of the same class.

However, the record date for the demerger has yet to be announced and will be set once the statutory filings are completed.

The company received a nod from the Mumbai bench of the National Company Law Tribunal (NCLT) last week for its restructuring plan as well.

On March 4, 2024, Tata Motors’ board of directors approved the demerger of the company into two separate listed companies—one for its commercial vehicles business and the other for its passenger vehicles (PV), comprising PV, electric vehicles (EV), Jaguar Land Rover (JLR) and related investments.

Tata Motors' commercial vehicle business will be demerged into Tata Motors Commercial Vehicles Limited (TMLCV). Further, its existing PV business in Tata Motors Passenger Vehicles Limited (TMPV) will be merged into TML, the existing listed entity.

TMLCV and TML will be renamed upon receiving necessary approvals, resulting in two separate entities.

The commercial vehicles business and its related investment will be listed under the name TML. Its passenger vehicle and electric vehicle businesses, JLR, which will merge with the currently listed Tata Motors, will be listed under the name TMPV.

Tata Motors on September 29 had said Girish Wagh and Shailesh Chandra will lead commercial vehicle and passenger vehicle entities as part of the demerger process.

The Mumbai-based auto major's commercial vehicles business and its related investments would be housed in one entity, while the passenger vehicles business, including PV (Passenger Vehicle), EV (Electric Vehicle), JLR (Jaguar Land Rover), and its related investments, will be part of the other firm.

In a regulatory filing, the company said its board has approved the appointment of Girish Wagh to the board of TML Commercial Vehicles Ltd—the proposed listed entity in which the commercial vehicles business of the automaker would be demerged—as an Additional Director, Managing Director and CEO, effective October 1, 2025.

The automaker also appointed Shailesh Chandra as an Additional Director, Managing Director and CEO of the passenger vehicle entity company, effective October 1, 2025, for a period of three years till September 30, 2028.

Chandra will continue to serve as the Managing Director of Tata Passenger Electric Mobility Limited, the electric vehicle entity and wholly owned subsidiary of the company, the filing said.

The company also appointed PB Balaji, who is set to join JLR as its global CEO, as a director on the boards of both PV and CV entities.

Addressing shareholders in the company's 80th Integrated Annual Report for FY25, chairman N Chandrasekaran noted that the demerger of Tata Motors into two listed entities—Commercial Vehicles and Passenger Vehicles (including EVs and JLR)—is progressing as planned.

"The proposed demerger will bring greater strategic clarity and agility, enabling a more focused approach to execution and value creation, delivering superior experiences for customers, rewarding careers for employees, and long-term returns for shareholders," N Chandrasekaran said.

In early FY26, shareholders approved the demerger, which is expected to be effective during the second half of 2025, with shareholders receiving equivalent shares in both entities, the chairman added.

Shares of Tata Motors had touched an intraday high of ₹685 apiece on the National Stock Exchange (NSE) and a day’s low of ₹670.50 apiece on Monday, September 29.

The stock was trading at ₹670.90 per share at 11:53 AM, falling 0.30%.

Over the last five trading days, the auto firm’s shares have lost 5%, and from the beginning of the year, they have tumbled more than 10%.

Tata Motors has a market capitalisation of ₹2.47 lakh crore.

Last month, S&P Global Ratings had said Tata Motors' balance sheet strength will offset the impact of the demerger of its commercial vehicle business and risks associated with the proposed acquisition of Italian firm Iveco.

"The Iveco acquisition will not affect our rating on Tata Motors (BBB/Stable/--). This is because the rated entity will only house the passenger vehicle business after the demerger, which will likely conclude shortly," the ratings agency had said.