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Tata Motors is set to carry out its long-planned demerger of its passenger vehicle termed “PV” and commercial vehicle termed “CV,” businesses from October 1, 2025. The demerger aims to unlock value and establish a more focused strategic direction for both businesses, as JLR continues to face ongoing challenges in international markets.
Record Date and Distribution of Shares
The record date for the demerger is anticipated to be around mid-October, awaiting a final decree from the Registrar of Companies. Shareholders in Tata Motors will receive one share of TML Commercial Vehicles Ltd (TMLCV) for every share held in Tata Motors. The demerger will also transfer ₹2,300 crore of non-convertible debentures to the CV business.
Approval by the Regulator
The NCLT has sanctioned the demerger. The demerger plan is that Tata Motors’ CV business will be transferred to TMLCV as part of the scheme, and the PV business will carry on as Tata Motors Passenger Vehicles Ltd (TMPVL) after the renaming.
Jefferies said, “The demerger of the commercial vehicle (CV) business is on track, and NCLT approval has been received. The effective date is 1 Oct and the record date is tentatively in mid-Oct, subject to final approval from the Registrar of Companies. The stock will trade ex-CVs on the day after the record date and will subsequently be renamed Tata Motors Passenger Vehicles Limited (TMPVL),” Jefferies said in a note after meeting Tata Motors management.
Listing Timeline
Upon the completion of all formalities, it is anticipated that the CV business will list in November 2025, subject to all regulatory approvals being received.
Market Context:
Tata Motors shares have dropped about 32% over the past year, largely due to weak demand for JLR in China, Europe, and the US. Analysts say there are several challenges for JLR, including warranty and emissions costs, tariffs on US exports, and age of key models (the Range Rover, Range Rover Sport, and Defender).
Jefferies also said: “While India PV demand looks good, JLR contends with competition, taxes in China, and the change to electric vehicles; we are less confident on PV margin improvement, and the Iveco acquisition impact.” The firm set an underperform rating and target price of ₹575.
Motilal Oswal noted “Nonetheless, JLR is facing several headwinds, which include tariff-led slowdown for exports to the US, demand weakness in key regions like Europe and China, and rising VME, warranty and emission costs,” comparable difficulties and retained a neutral rating with a target price of ₹686, and Nuvama continued a reduced call with a target price of ₹680, supporting their outlook based on tepid growth prospects for JLR.
Operational Update
JLR is anticipated to begin restoring production gradually in a controlled manner in the coming days, following the temporary production stoppage related to the recent cyber-attack.
