Tata Motors is on the verge of a significant transformation as the countdown to its demerger begins. With shareholders overwhelmingly approving the split, attention now turns to the specifics of this corporate reshaping. What will the demerger ratio be, and how will it influence the current holdings of Tata Motors shareholders? Here’s everything you need to know about this pivotal moment in the company’s history.

Timeline for the Demerger

The actual separation of Tata Motors’ business divisions is set to take place by Q3 of FY26. While the voting process is complete, the meticulous work required to ensure a smooth transition will take over a year. This timeline allows Tata Motors the necessary leeway to effectively separate its operations and establish two distinct entities on the stock market.

Shareholders Give the Green Light

In an impressive display of support, Tata Motors received an overwhelming 99.9995% of shareholder votes in favor of the demerger. Out of 2.73 billion shares, only about 13,700 votes opposed the split, marking one of the most unanimous decisions in Indian corporate history. This near-total approval reflects strong confidence in the company’s future direction.

What Changes with the Demerger?

With the demerger, Tata Motors will evolve into two separate publicly traded companies:

• Passenger Vehicles (PV) Division: This entity will encompass all passenger vehicles, including electric vehicles and the luxury brand Jaguar Land Rover.
• Commercial Vehicles (CV) Division: This company will focus on commercial operations, featuring trucks, buses, and other heavy vehicles.

For every share they own in Tata Motors, shareholders will receive one share in the new Commercial Vehicles company (TMLCV), with both companies set to have a face value of Rs 2.

Stock Performance Insights

Even before the formal split occurs, market sentiment surrounding Tata Motors is notably positive. The stock has surged by 9% within just two days and has increased by 16% over the past month. However, it is essential to note that Tata Motors is still recovering from challenges, having dropped 15% in the last six months and 32% over the past year.

Upcoming Events: Dividend and Q4 Results

Looking ahead, Tata Motors is gearing up to disclose its Q4 results on May 13. During this announcement, the board is also expected to deliberate on declaring a dividend for FY25. This upcoming report will be crucial for assessing the company’s performance prior to the anticipated split.

In summary, the demerger of Tata Motors marks a transformative chapter for the company, one that promises to reshape its operations and offer new opportunities for shareholders.