Tata Motors Demerger: Tata Motors’ long-awaited demerger has finally entered its last leg, and the buzz has only grown stronger. The Tata group company and a leading Indian automaker, formally separated its commercial vehicle (CV) and passenger vehicle (PV) businesses into two independent entities.
The PV arm — which houses the company’s electric vehicle (EV) business and Jaguar Land Rover (JLR) — trades independently on the Indian stock exchanges, while the CV arm’s listing is keenly awaited by investors.
Tata Motors Demerger Details
fixed the demerger ratio as 1:1. This means each shareholder will receive one share of TML Commercial Vehicles Ltd (TMLCV) for every share of Tata Motors held.
The record date for the demerge was October 14.
During the one-hour pre-market session held on the day, the parent of (JLR) changed hands at ₹400. The gap from Monday’s closing price of ₹660.75 implies a valuation of ₹260.75 a share for the spun-off commercial vehicles unit.
Tata Motors PV: Focused on Cars, EVs and JLR
The existing share of Tata Motors represents the passenger vehicle side of the business, ranging from both Jaguar Land Rover and the domestic PV business that includes the ICE and EV segments. Along with this, the listed Tata Motors houses the investment in Tata Technologies.
With this, the new Tata Motors will become a consumer and technology-focused company.
The PV business offers higher growth potential, but also comes with increased risk due to its global exposure (via JLR) and significant ongoing investments in EVs, said Prashant Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities.
He believes that the listed PV segment is well placed to gain from growing EV adoption in India, improving margins for JLR and a pipeline of premium product launches.
Based on our analysis of financial performance, growth drivers, and peer valuation multiples, the PV business is estimated to be valued at approximately ₹500 per share, Tapse opined.
As per SBI Securities, (TMLPV) stock is likely to trade between ₹285-384 post demerger. The brokerage believes that any potential upside remains dependent on the recovery in JLR volumes and improvement in profitability.
The CV Arm Spins Off
The demerged arm of Tata Motors — — will house the commercial vehicle business, along with other investments, including the stake in Tata Capital.
Tapse said that the business is fundamentally cyclical, B2B in nature, and closely tied to overall economic activity and infrastructure development.
Tata Motors has a strong leadership position in this segment, with a domestic market share of over 37%. Now with the stake purchase in Inveco Group, the company will also make its presence known internationally.
Based on financial metrics, growth prospects, and peer valuation multiples, the standalone CV entity is estimated to be valued at approximately ₹400 per share, Tapse opined, adding that it is likely to attract investors seeking steady cash flows and cyclical value opportunities.
Tata Motors Commercial Vehicle (TMLCV) shares will be renamed as Tata Motors when they list on the bourses, most likely in November. Meanwhile, the PV arm’s business will list at TMPVL.
With the split done, investors are asking a key question: Is the listed Tata Motors stock still a buy?
Should You Invest In Listed Tata Motors Shares?
Harshal Dasani, Business Head, INVAsset PMS, said that Tata Motors’ recent demerger marks a pivotal transition. “This structural split is aimed at sharper capital allocation, operational efficiency, and unlocking long-term value across independent growth cycles,” he added.
Commenting on the financials, “In Q1 FY26, the CV segment delivered an EBITDA margin of around 12.2%, despite a 4–5% dip in volumes, supported by disciplined cost control and a healthy product mix. The passenger and EV divisions continue to benefit from rising domestic demand and India’s growing electric mobility ecosystem. However, the global JLR business remains under some pressure, with EBIT margin guidance revised to 5–7% for FY26, reflecting higher investment in next-generation EVs and product transitions.”
Over the medium term, Dasani sees both entities unlocking value through focused strategy execution and cleaner balance sheets. “Tata Motors remains attractive for long-term investors who believe in the company’s EV leadership, global diversification, and ability to sustain double-digit operating margins,” he added.
While Tapse finds both entities as strong portfolio holdings, he believes that the choice to pick one will depend on the investor’s risk appetite and investment horizon.
From a fundamental perspective, Tapse finds PV business offering greater upside potential, driven by strong growth levers and strategic positioning in the EV and luxury segments. On the other hand, the CV business provides more defensive characteristics, particularly appealing in a supportive macroeconomic and infrastructure-led growth environment, he added.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.