Tata Motors shares down 40% today: Here's what happened
What's the story
Tata Motors' shares plunged by nearly 40% in a special pre-open session today. The auto giant's stock was trading at ₹400 per share, a decline of ₹260.75 or 39.5% from the previous close. The fall comes as part of the company's demerger plan for its commercial vehicle business, which is set to be listed as Tata Motors Commercial Vehicles Limited (TMLCV).
Demerger specifics
Record date set for share allocation
Tata Motors has set October 14 as the record date for determining shareholders who will be allotted shares of TMLCV. The company said that eligible shareholders will get one fully paid-up share in TMLCV for every share held in Tata Motors as on the record date. This is part of a broader demerger strategy where Tata Motors' commercial vehicle business will be separated into a new entity.
Entity transformations
Post-demerger structure
Post-demerger, Tata Motors Passenger Vehicles Limited will continue its passenger vehicle business and investments in electric vehicles and Jaguar Land Rover (JLR). Meanwhile, TMLCV will initially be listed under its current name and will eventually be renamed Tata Motors Limited (TML) after receiving necessary approvals. The passenger vehicle and electric vehicle businesses, along with JLR, will remain with the existing listed entity, which will be renamed Tata Motors Passenger Vehicles Limited (TMPVL).