Tata Motors shares in focus as company takes one step further towards demerger

Shares of Tata Motors Ltd., the maker of passenger and commercial vehicles and the parent of Jaguar Land Rover (JLR), are expected to be in focus on Tuesday, August 26, after the National Company Law Tribunal (NCLT) approved the company’s composite scheme of arrangement.The scheme involves Tata Motors, its subsidiary TML Commercial Vehicles Ltd. (TML CV), Tata Motors Passenger Vehicles Ltd., and their respective shareholders.

Back in March 2024, the board had cleared a proposal to split Tata Motors into two separately listed entities.

Under this plan, the commercial vehicle (CV) business, along with related investments, will be demerged into TML CV. Meanwhile, the passenger vehicle (PV) segment, which includes the EV arm, JLR, and related investments, will be consolidated under Tata Motors Passenger Vehicles Ltd.The demerger of Tata Motors’ CV business will take effect from October 1, 2025. Following implementation, both entities will be renamed and listed independently.

As per the approved shareholding structure, the demerger ratio is set at 1:1, meaning shareholders will receive one share of the newly demerged company for every one share held in Tata Motors. The new entity will also be listed on the NSE and BSE.

Out of the 33 analysts that have coverage on Tata Motors, 18 of them have a ‘Buy’ rating, nine say ‘Hold’, while six have a ‘Sell’ rating.

Shares of Tata Motors ended 0.85% higher on Monday at ₹686.10. The stock is down over 8% so far in 2025.