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Tata Motors Demerger Update: Shareholders of Tata Motors approved the demerger proposal with a majority vote. What’s next for investors?
Tata Motors Demerger Meeting: Shareholders approved the proposal, check ratio and other details.
Tata Motors Demerger: Tata Motors’ shareholders on Tuesday approved the demerger proposal of separating the auto manufacturer into two listed entities – commercial vehicle and passenger vehicle. The resolution for the Composite Scheme of Arrangement was passed with the requisite majority, with a total of 2,730,875,858 votes polled. Out of these, 2,730,862,142 votes (99.9995%) were in favor, and 13,716 votes (0.0005%) were against. With shareholders’ approval, the way for the demerger of the company has been cleared.
On Wednesday, investors welcomed the move as shares gained 4 per cent to become the top gainer of Nifty 50 index.
But there’s a question among investors about what will happen next and when it will become effective. Let’s know more about it.
Tata Motors Demerger Plan Details
According to the plan, Tata Motors Limited (TML) will split its Commercial Vehicle business, including all its assets, liabilities, employees, and related investments, into TMLCV. Meanwhile, the Passenger Vehicle business in TMPV will merge back into the existing listed entity TML.
When the Scheme takes effect, both TMLCV and TML will be renamed, resulting in two separate listed entities: 1) The Commercial Vehicle business and related investments under TML, and 2) The Passenger Vehicle business, including the Electric Vehicle (TPEM) business, JLR, and related investments, under TMPV.
Tata Motors Demerger Ratio
Shares entitlement ratio will be 1:1 as announced earlier. Tata Motors’ shareholders will receive one share of TMLCV of Rs 2 per share for every 1 share of TML being held.
Tata Motors Demerger Timeline
Let’s have a look at how Tata Motors Demerger Process Move:
August 01, 2024: Tata Motors’ board approved the Scheme of Arrangement (the demerger scheme).
March 25, 2025: The National Company Law Tribunal (NCLT), Mumbai Bench, ordered a shareholders’ meeting to consider the demerger.
March 28, 2025: It is fixed as cut-off date for determining shareholders eligible to vote on the demerger.
May 06, 2025: Shareholders gave the green nod to the demerger proposal.
Tata Motors Demerger Effective Date
Tata Motors in Q3FY25 investor presentation informed that the company is expected to implement the demerger between October and December 2025.
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