Tata Motors Demerger Causes Stocks to Surge

Tata Motors Demerger Causes Stocks to Surge, Drop Amid Investor Jitters

Mumbai / India, October 14, 2025 — Tata Motors’ bold move to split its commercial vehicle (CV) and passenger vehicle (PV) operations into two distinct listed entities has triggered sharp market swings and intense scrutiny from analysts. The restructuring, effective October 1, has already prompted dramatic price adjustments and raised questions about value unlocking, valuation clarity, and investor impact. 

📉 Sudden Price Adjustment: 40% Drop at Open

In early trading, Tata Motors’ stock plummeted from its previous close of ₹660.90 to approximately ₹399 — a nearly 40% decline in a single session. 

However, this sharp fall is largely notional — the result of the company's demerger rather than an actual loss in corporate value. 

Tata Motors now trades as Tata Motors Passenger Vehicles Ltd (TMPV), while the commercial vehicle business has been spun off into a new entity, TML Commercial Vehicles Ltd (TMLCV). 

All shareholders as of the record date, October 14, 2025, will receive one share of TMLCV for every share they hold in Tata Motors. 

🏷️ Valuations & Broker Views: Split Almost Even

Brokerages are eyeballing the split carefully. Nomura, for instance, has assigned nearly equal values to the PV and CV businesses, estimating ₹367 per share for the PV arm and ₹365 for CV. 

Other analysts warn of near-term volatility and technical risk as the market digests the change. 

Meanwhile, SBI Securities sees the demerger as a long-term positive — allowing both arms to focus on their verticals independently, with better transparency and sharper capital allocation. 

🧠 What Does This Mean for Investors?

The apparent 40% drop is a mechanical adjustment reflecting the removal of the CV business from the TMPV valuation — not a loss in your total holdings. 

Between now and the listing of TMLCV (expected in 30–45 days), some stock price fluctuations are likely as markets adjust to the new structure. 

Both entities could attract different investor profiles: those bullish on EVs, JLR, or consumer autos might lean toward TMPV, while logistics and infra players may prefer exposure to the CV business. 

Analysts believe the demerger will unlock hidden value over time, as each business focuses on its core strengths. 

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