Tata Motors, based in New Delhi, revealed on Monday its decision to demerge the company into two distinct listed entities. This strategic move aims to streamline operations and enhance focus within the organization. The announcement came through a regulatory filing by the auto major.

Division of Business Segments

Under the proposed demerger, Tata Motors plans to segregate its commercial vehicles business and related investments into one entity. Meanwhile, the passenger vehicles segment, inclusive of Passenger Vehicles (PV), Electric Vehicles (EV), Jaguar Land Rover (JLR), and associated investments, will form the other entity.

Implementation Process

The demerger process will be executed through a scheme of arrangement under the oversight of the National Company Law Tribunal (NCLT). It is emphasized that all shareholders of Tata Motors Ltd (TML) will maintain identical shareholding in both listed entities post-demerger.

Market Response

Following the announcement, Tata Motors shares experienced a slight decline, closing at Rs 987.20 apiece on the Bombay Stock Exchange (BSE) with a decrease of 0.12% on Monday.

In summary, Tata Motors’ decision to demerge its business into two separate listed companies signifies a strategic realignment aimed at optimizing operational efficiency and enhancing shareholder value. The implementation of this demerger plan underlines the company’s commitment to driving sustainable growth and maximizing performance across its diversified business segments.