Investors must trade today to participate in Tata Motors demerger
What's the story
Tata Motors will be going through a major restructuring process, with its commercial vehicle (CV) business set to be demerged into a separate entity. The move will create two distinct business verticals within the company: Tata Motors' Commercial Vehicle (TMLCV) and passenger vehicle (PV) units. The restructuring process is set to take effect with the record date on October 14, 2025, and today, October 13, is the last day to trade before the demerger.
Demerger specifics
Record date set for demerger
The demerger will see the Commercial Vehicle (CV) unit listed separately on stock exchanges, while the existing Tata Motors structure will continue to house the Passenger Vehicle (PV), Electric Vehicle (EV), and Jaguar Land Rover (JLR) businesses. A record date of October 14 has been set for the demerger, with investors holding Tata Motors shares on this date getting one share of TMLCV for every share of Tata Motors held.
Trading adjustments
Special pre-opening trading session for Tata Motors shares
Both BSE and NSE will hold a special pre-opening trading session for Tata Motors shares on October 14. This will give investors a one-hour window to arrive at the fair value of the entities post-demerger. Also, all open Tata Motors futures and options (F&O) contracts expiring on October 28, November 25, and December 30, 2023, will now expire early on October 13.
Debt alignment
Financial alignment post-demerger
As part of the demerger process, Tata Motors is also transferring around ₹2,300 crore worth of non-convertible debentures (NCDs) and related liabilities to TMLCV. This move is aimed at aligning debt with the business that generated it, further streamlining Tata Motors' financial structure post-demerger. The listing of these demerged entities on BSE and NSE will follow in the coming weeks.