Bad news for Tata Motors shareholders as shares plunge 40% within hours due to…

Tata Motors shares fell nearly 40% in early trading on Tuesday. The stock opened at ₹399 on the Bombay Stock Exchange (BSE), down from ₹660.90 on Monday. The decline stems from the demerger of the company’s commercial vehicle business. Following the demerger, the value of the commercial vehicle business has been deducted from the parent company’s market value, leading to this significant drop in the share price.

Today, was the record date for the Tata Motors de-merger. Under this, the company has been divided into two parts: Tata Motors Passenger Vehicles Limited (TMPV) and Tata Motors Commercial Vehicles Limited (TMLCV). Shareholders who held Tata Motors shares on or before October 13th will receive one share of TMLCV for every one held. At 11 am, Tata Motors shares were trading at ₹415.60, up 4.16% on the BSE.

What will be the benefit?

Tata Motors has been renamed Tata Motors Passenger Vehicles Limited (TMPV). This new company will include the passenger vehicles, electric vehicles, and Jaguar Land Rover (JLR) businesses. TMLCV shares will be credited to shareholders’ demat accounts within 30-45 days. The new company will be listed separately on the stock exchanges once all regulatory approvals are completed. Brokerage firms believe this de-merger will bring clarity to the companies’ valuations and improve their commercial focus.

News