Tata Motors to demerge into two separate listed companies

Tata Motors will split its commercial vehicle and passenger vehicle businesses into separate entities.

The Board of Directors of Tata Motors Limited (TML) has approved the proposal of demerger into two separate listed companies. 

TML will split its commercial vehicle and passenger vehicle businesses into separate entities. The latter includes the passenger vehicles, EVs, JLR and its related investments in another entity. 

TML has stated that the demerger will be implemented through an NCLT scheme of arrangement and all shareholders of TML will continue to have identical shareholding in both the listed entities. The company believes that the demerger is a logical progression of the subsidiarization of PV and EV businesses done earlier in 2022.

Speaking about the demerger, N Chandrasekaran, Chairman of Tata Motors, said, “Tata Motors has scripted a strong turnaround in the last few years. The three automotive business units are now operating independently and delivering consistent performance. This demerger will help them better capitalise on the opportunities provided by the market by enhancing their focus and agility. This will lead to a superior experience for our customers, better growth prospects for our employees and, enhanced value for our shareholders.”

The official statement further adds that the NCLT scheme of arrangement for the demerger will be placed before the TML Board of Directors for approval in the coming months and will be subject to all necessary shareholder, creditor and regulatory approvals, which could take a further 12-15 months to complete. The demerger will have no adverse impact on employees, customers, and the company's business partners.