By Tuhin Patel

Copyright republicworld

Effective October 1, 2025, Tata Motors will divide its operations into two independent, publicly listed companies: one focused on commercial vehicles (CV) and the other on passenger vehicles (PV).This decision, known as a demerger, has been approved by the company’s board of directors, regulatory authorities, and the National Company Law Tribunal (NCLT), ensuring compliance with legal and governance standards.The commercial vehicle business, which includes trucks, buses, and other heavy-duty vehicles, will be led by Girish Wagh, a seasoned executive within Tata Motors.The passenger vehicle business, encompassing cars, SUVs, electric vehicles (EVs), and investments like the luxury brand Jaguar Land Rover (JLR), will be headed by Shailesh Chandra.The demerger is designed to allow each business to operate independently, tailoring its strategies to its specific market demands, growth opportunities, and capital requirements.By separating the CV and PV units, Tata Motors aims to enhance operational focus, improve accountability, and deliver greater value to shareholders through more targeted and efficient business management.At the heart of any demerger lies the record date, the invisible line that determines who gets the new shares. For Tata Motors, the effective date kicks off on October 1, 2025, but the record date is tentatively set for mid-October 2025, pending final nod from the Registrar of Companies (RoC). This isn’t October 1, despite some early buzz; that’s the legal activation, when the scheme becomes binding.This isn’t a regular stock split that just cuts shares to make them cheaper. It’s a demerger that divides the company. The ratio is 1:1. For every Tata Motors share you own on the record date, you get one share in the new commercial vehicle company (TMLCV). Your old shares turn into shares in the passenger vehicle company (TMPVL). If you have 100 shares now, you’ll end up with 100 in each after the split.Your ownership percentage stays the same across both.On September 30, 2025, Tata Motors shares opened at Rs 672.50 on the BSE. The stock hit a high of Rs 683.50 and a low of Rs 666.95 during the day, closing 1.18% higher at Rs 680.45.As per the report by Emkay, Tata Motors’ analyst meet highlighted that the demerger is expected by mid-October (subject to ROC approvals), with the CV business to be listed separately by early November while the PV arm remains in the parent entity; the company upgraded its FY25-30 CV industry growth outlook to 6-8% (from 5-7%) aided by GST cuts, which reduce fleet operators’ opex by 1-2% and directly support profitability, with management expecting double-digit CV growth in H2 and 7-8% PV growth in FY26 after a flat H1; bookings have risen 25-30% since early September (vs industry’s 20%), though Q3 may see higher discounts to push volumes; the IVECO acquisition was termed prudent with EU exposure risks already factored into valuations (2.3x EBITDA) and is expected to be EPS-accretive from Day One with a targeted ~20% RoCE; for JLR, September retails were unaffected by the recent cyber-attack though a short-term liquidity impact is anticipated from halted production, with operations set to resume soon, while demand remains resilient in the US, stable in China, and steady across the UK and EU; Emkay reiterated its BUY rating on Tata Motors with a target price of Rs 750.Disclaimer: The views expressed in this article are purely informational, and Republic Media Network does not vouch for, promote, or endorse any opinions stated by any third party. Stock market and Mutual Fund investments are subject to market risks, and readers are advised to seek expert advice before investing in stocks, derivatives and, Mutual Funds.