Tata Motors Passenger Vehicles Ltd (TMPVL) commenced trading on the National Stock Exchange (NSE) at ₹400 per share in the pre-open session today, following the demerger of Tata Motors' passenger and commercial vehicle businesses. Today also marks the record date for the demerger, which was effective October 1, 2025. This split allows the two entities to operate and be valued independently.
Under the demerger scheme, shareholders will receive one share of Tata Motors Commercial Vehicles Ltd (TMLCV) for every share of Tata Motors held. Tata Motors shares have experienced a decline recently, but this is attributed to the price adjustment following the demerger, not due to negative market sentiment.
Demerger Details
The Passenger Vehicle unit (TMPVL) comprises Tata Motors' domestic PV business, Jaguar Land Rover (JLR), and stakes in Tata Sons, Tata Steel, and Tata Technologies, along with other investments. The Commercial Vehicles (CV) entity includes the domestic CV business, the Iveco business (acquisition slated to complete in 2026), and a stake in Tata Capital.
Girish Wagh has been appointed as the Additional Director, Managing Director, and CEO of TMLCV. Shailesh Chandra will serve as the Additional Director, Managing Director, and CEO of TMPVL, continuing to lead the electric vehicle subsidiary.
Analyst Valuations
Several brokerages have provided initial valuations for the separated entities. Nuvama Alternative and Quantitative Research values the PV business at ₹410 per share, with ₹176 allocated to the India PV business, ₹188 to JLR, ₹16 to the JLR China JV, and ₹33 to the Tata Technologies stake, after applying a 20% holding company discount. They estimate the CV entity will list within 30-45 days, with an estimated value of ₹280 per share.
Nomura has set a target price of ₹367 per share for the PV entity and ₹365 per share for the CV entity, indicating an almost equal valuation split. Goldman Sachs values the consolidated Tata Motors business at ₹700 per share, allocating ₹236 to JLR, ₹130 to the domestic PV business, and ₹306 to the CV business. SBI Securities expects TMPV to trade between Rs 285 and Rs 384 post demerger and projects TMLCV to trade between Rs 320 and Rs 470 post listing.
Strategic Rationale
The demerger is intended to unlock value through clearer valuation of the distinct businesses and allow for more focused strategies and better capital allocation. Tata Motors has stated that the separation will provide strategic focus and agility to each segment. It should also provide employees more growth opportunities and create more value for shareholders.
PV Business Outlook
Nomura anticipates momentum in the PV business, supported by festive and pent-up demand following the Goods and Services Tax (GST) cut that came into effect on September 22, 2025. Premiumization remains a key theme, with strong bookings for compact and micro SUVs like the Punch and Nexon. The newly unveiled Harrier electric vehicle (EV) has also seen an encouraging initial response. Management is targeting double-digit Earnings before interest, tax, depreciation and amortisation (Ebitda) margins in the medium term, driven by richer mix, improved pricing, and cost efficiencies.
CV Business Outlook
For CVs, management expects industry growth of around 5% in FY26F, aided by GST reduction. The CV entity will include the Iveco acquisition from April 2026. The company is targeting a 5% revenue compound annual growth rate (CAGR) and Ebit margin improvement from 5.4% to 7.5% over 2024–28E.
JLR Operations
JLR's operations are resuming across facilities following the cyber incident in September. Management has indicated no significant demand impact, and production is expected to pick up in the coming weeks.
