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Tata Motors announced the demerger of its commercial and passenger vehicle businesses, effective October 1, 2025.
Tata Motors’ net profit falls 30 per cent YoY in Q1FY26.
Tata Motors Demerger: Tata Motors Limited has given a major update in its corporate restructuring process for the separation of the commercial vehicle business from the passenger vehicle business. The automaker has announced the effective date for the demerger on October 1, 2025. The company aims to complete the process within the current quarter, according to investor’s presentation for Q1FY26.
In a corporate action like a demerger, the effective date is the date from which the changes officially take effect in the company’s legal and financial structure.
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.
October 01, 2025: Split to become effective from this date.
Shareholders’ Green Light
Tata Motors’ shareholders in May 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.
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
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