Tata Motors Demerger Gets Shareholder Approval, Commercial and Passenger Vehicle Business to be Separated

Tata Motors has received overwhelming support from its shareholders to split its commercial vehicle (CV) and passenger vehicle (PV) businesses into two separate listed companies. In a big vote of confidence, 99.99% of shareholders approved the plan. This news pushed Tata Motors’ stock price up sharply, making it the top-performing stock on the Nifty 50 in early Wednesday trading. By 1:45 PM, Tata Motors shares were trading at ₹678.40, showing a gain of ₹4.66 or over 4%.

What’s Happening in the Demerger?

Under this approved demerger plan, Tata Motors will split into two companies:

• One company will focus only on commercial vehicles like trucks and buses.
• The other company will handle the passenger vehicle business, which also includes the premium British brand Jaguar Land Rover (JLR).

The demerger has been in the works since March last year. The main goal is to allow each business segment to grow independently and become stronger in its own space. As part of the deal, current Tata Motors shareholders will get one share of the new company for every Tata Motors share they currently own.

India-UK FTA Brings More Good News

Adding to the excitement was the signing of the India-UK Free Trade Agreement (FTA) on Tuesday evening. This deal is expected to give a big boost to JLR’s sales in India. Why? Because the FTA will reduce import tariffs on premium cars from over 100% to just 10%, though there will be a set quota. While the exact quota has not been shared yet, experts believe this will help JLR grow its presence in the Indian luxury car market.

How Is Tata Motors’ Stock Performing?

After the demerger approval and the FTA news, Tata Motors shares rose nearly 4%. Looking at recent trends:

• The stock has gained around 3% over the past five days.
• It is up by 15% over the last month.

However, the longer-term picture is mixed:

• Over the past six months, the stock is down by 18%.
• Over the past year, it has dropped 32%.
• So far in 2025, the stock has fallen by 11%.

Despite this ups and downs, Tata Motors remains a heavyweight in the market with a market cap of ₹2.46 lakh crore. Over the past 52 weeks, the stock’s price has ranged between ₹535.75 and ₹1,179.00.

What Does This Mean for Tata Motors?

The approval of the demerger and the positive FTA news represent a turning point for Tata Motors. By splitting into two focused businesses, the company hopes to unlock more value for shareholders and improve its competitive edge. Investors will be watching closely to see how each new company performs in its area of strength.