Tata Motors stock jumped over 4% after shareholders approved a plan to split the company into two separate businesses.
The Deets: Tata Motors is officially demerging its Passenger Vehicle (PV) and Commercial Vehicle (CV) businesses into two distinct listed companies.
The PV arm, which includes Jaguar Land Rover and the CV division which includes trucks, buses, and heavy movers will now operate as separate companies on the stock market.
If you own Tata Motors shares, you’ll get one share of the new CV company for every share you currently hold.
The why: these are very different businesses with different rhythms. One caters to luxury and personal mobility, the other runs on logistics and infrastructure. Separating them allows each to grow with laser focus.
This is all about unlocking value. Investors will now be able to price and bet on the PV and CV businesses individually, which means more clarity, sharper strategy, and potentially, better returns.
Think of it as a strategic clean-up that gives both businesses room to breathe and scale, whether that’s pushing EV innovation or doubling down on truck fleets.
Zoom Out: Tata Motors has been on a steady revival track. The CV business remains a backbone, powering everything from highways to construction sites. Meanwhile, the PV business has gone premium with JLR and electric with the Nexon EV leading the way.
In Q4 FY24, Tata Motors reported a consolidated revenue of ₹1.2 lakh crore and a net profit of ₹17,528 crore, boosted largely by JLR’s solid performance and domestic CV demand.
This demerger can be defined as a strategic reboot.
