Tata Motors To Demerge: Shareholders Will Get Identical Holding In Demerged Entity

Tata Motors has approved a proposal for the demerger of the company into two separate listed companies, which will be commercial vehicle businesses and its related investments in one entity and passenger vehicle businesses, including PV, EV, and JLR and their related investments in another entity.

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

"Over the past few years, the Commercial Vehicles (CV), Passenger Vehicles (PV+EV), and Jaguar Land Rover (JLR) businesses of Tata Motors have delivered a strong performance by successfully implementing distinct strategies. Since 2021, these businesses have been operating independently under their respective CEOs," the company said in its press release. 

Tata Motors added that the NCLT scheme of arrangement for the demerger shall be placed before the TML Board of Directors for approval in the coming months, which could take a further 12–15 months to complete. "The demerger will have no adverse impact on employees, customers, or our business partners," it said.

Commenting on the demerger, Tata Group Chairman N Chandrasekaran said, “Tata Motors has scripted a strong turnaround in the last few years. The three automotive business units are now operating independently and delivering consistent performance. This demerger will help them better capitalise on the opportunities provided by the market by enhancing their focus and agility. This will lead to a superior experience for our customers, better growth prospects for our employees, and enhanced value for our shareholders.”