Tata Motors shares have been under sell-off pressure throughout October 2025. From the effective date for Tata Motors’ share demerger to the Tata Motors demerger record date, the auto major ended lower on all sessions. After the Tata Motors demerger record date, Tata Motors’ share price has slipped from 660.75 apiece on the NSE to ₹396.50 per share, logging a 40% dip in the stock after the record date for the composite scheme of the Indian auto major. This might have put doubt into the minds of Tata Motors shareholders, whether the demerger is a loss-making affair for them, or whether there would be some benefit from this corporate move.
According to stock market experts, Tata Motors’ demerger is a composite scheme in which Tata Motors Ltd will be divided into two separate business entities: Tata Motors Commercial Vehicles (TMLCV) and Tata Motors Passenger Vehicles (TMPV). The beneficiary Tata Motors shareholders will be awarded one share of the Tata Motors Commercial Vehicles, which is expected to list on the Indian bourses in November 2025. After this demerger scheme, Tata Motors Commercial Vehicles will have 37.10% of the Tata Motors business while Tata Motors Passenger Vehicles will have the remaining 62.90% of the Tata Motors business. They said that the 40% dip in Tata Motors shares after the demerger record date is noticeable, and it shouldn’t worry beneficiary Tata Motors shareholders. They predicted a last laugh for the beneficiary Tata Motors shareholders as Tata Motors Commercial Vehicles shares may list around the ₹300 to ₹470 range, delivering a decent premium to Tata Motors demerger beneficiaries.
Tata Motors share demerger
On why Tata Motors’ share price crash after the Tata Motors demerger record date won’t impact much on a beneficiary’s portfolio, Khushi Mistry, Research Analyst at Bonanza, said, “The 1:1 demerger will create two focused entities, Tata Motors Commercial Vehicles (TMLCV) and Tata Motors Passenger Vehicles (TMPV). TMLCV will enter the market as India’s largest commercial vehicle (CV) manufacturer with a 37.1% market share.”
Highlighting the fundamentals of two separate entities post-Tata Motors demerger, the Bonanza expert said, “In Q1FY26, the CV segment sustained a healthy double-digit EBITDA margin of 12.2%, even as revenue declined, supported by continued operational efficiencies. It will also benefit from the €3.8 billion Iveco acquisition, making it the world’s fourth-largest truck manufacturer (above 6 tonnes). The domestic CV industry is expected to grow 3–5% in FY26, supported by infrastructure and e-commerce demand. The TMPV segment will incorporate passenger vehicle (PV) business, electric vehicles (EV), and Jaguar Land Rover operations. The domestic PV segment is expected to grow 8–10% in H2FY26, aided by new launches, strong SUV positioning, and rising EV and CNG demand, which form 45% of its PV segment revenue.”
Reward or Trap
Pointing towards the indicative notional value of the composite scheme, Seema Srivastava, Senior Research Analyst at SMC Global Securities, said, “After the demerger, Tata Motors’ Commercial Vehicles (CV) business will trade independently, allowing investors to value it purely on its own financial strength, earnings visibility, and sector-specific prospects rather than being clubbed with the passenger vehicle and JLR segments. The indicative notional value of around ₹260 to ₹270 per share for the CV arm is derived from the residual value of Tata Motors’ pre-demerger stock price, implying a solid standalone base for listing.”
On the expected Tata Motors Commercial Vehicle share listing, Seema Srivastava said, “The actual listing price, however, is expected to be higher than the notional value, potentially in the ₹300 to ₹470 range, as markets anticipate improving momentum in commercial vehicle demand led by a revival in infrastructure spending, road development, construction, and logistics activity.”
Hence, Tata Motors’ share price crash after the Tata Motors share demerger should not be a worry for the beneficiary shareholders, as Tata Motors Commercial Vehicles’ share listing is expected to take place at a substantial premium.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
