BIG! Tata Motors Announces Demerger into Two Listed Companies: What's in Store for Shareholders? Check Details

big! tata motors announces demerger into two listed companies: what’s in store for shareholders? check details

The Board of Directors at Tata Motors convened a meeting on Monday, approving a proposal to demerge the company into two distinct, listed entities. The decision marks a strategic shift for one of India’s leading automotive giants and has far-reaching implications for shareholders and the industry at large.

Tata Motors Announces Demerger News 2024

Tata Motors will undergo a demerger that will segregate its business into two separate listed companies. The first entity will house the Commercial Vehicles (CV) business and its related investments, while the second entity will have the Passenger Vehicles (PV) businesses, including PV, EV, JLR (Jaguar Land Rover), and their corresponding investments.

Tata Motors Demerger News: Why company decided to demerge its business?

The decision to demerge stems from the successful independent operations of Commercial Vehicles, Passenger Vehicles, and Jaguar Land Rover businesses over recent years. These sectors, operating autonomously since 2021 under their respective CEOs, have demonstrated robust performances. The demerger is a natural progression following the earlier subsidiarization of PV and EV businesses in 2022. Tata Motors emphasizes the limited synergies between Commercial Vehicles and Passenger Vehicles but sees substantial synergies across PV, EV, and JLR, particularly in the realms of electric vehicles, autonomous technology, and vehicle software.

Tata Motors Demerger News: Reaction from Tata Sons Chairman

N Chandrasekaran, Chairman of Tata Sons, lauded the company’s recent achievements, stating, “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 capitalize 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.”

Tata Motors Demerger News 2024: What’s in store for shareholders?

The demerger will be implemented through an NCLT scheme of arrangement and all shareholders of TML shall continue to have the identical shareholding in both the listed entities.