Indian conglomerate Tata Group is planning to split its automotive business into two listed companies—one for passenger vehicles and another for commercial vehicles. This demerger is expected to boost employment and aligns with the company’s long-term growth strategy.
Here are the key highlights:
How will segregation work?
The Tata Motors Group will be divided into two separate listed entities:
What will be the impact?
Tata Sons Chairman N. Chandrasekaran described the demerger as a strategic move to accelerate business performance.“The proposed demerger will bring greater strategic clarity and agility, enabling a more focused approach to execution and value creation—delivering superior experiences for customers, rewarding careers for employees, and long-term returns for shareholders,” he said in the company’s 80th Integrated Annual Report.
In FY25, a tough year for Tata Motors, commercial vehicle sales declined by 5.1 per cent year-on-year to 384,704 units, and passenger vehicle sales slipped 3 per cent to 556,367 units.
When is it expected to happen?
The business split is expected to be completed in the second half of 2025. According to the company’s investor presentation earlier this year, the demerger is likely to be wrapped up by Q3 of FY26.
Tata Motors’ share division
As per the Composite Scheme of Arrangement, shareholders of Tata Motors Ltd (TML) will receive- One share of TMLCV (face value ₹2) for every one fully paid-up share of ₹2 held in TML of the same class.
Advisors for the Tata Motors Demerger
The company has appointed key advisors to facilitate the demerger:
- PwC Business Consulting Services LLP – Share entitlement report provider
- SBI Capital Markets – Fairness opinion advisor for the share entitlement ratio
- AZB & Partners – Legal advisors to the transaction
- Deloitte Touche Tohmatsu India LLP – Tax advisors for the transaction
