Tata Motors Limited (TML) announced today a strategic move to split its operations into two separate listed entities, marking a significant shift in its corporate structure. The decision, greenlit by the company’s Board of Directors, aims to enhance operational efficiency and sharpen focus in the rapidly evolving automotive landscape.
Under the proposed demerger plan, Tata Motors will bifurcate its activities into distinct entities. One entity will house the Commercial Vehicles business and associated investments, while the other will encompass the Passenger Vehicles businesses, including PV, EV, and Jaguar Land Rover (JLR), along with their respective investments. Importantly, existing TML shareholders will maintain identical stakes in both entities.
This decision comes on the heels of successful independent operations within the Commercial Vehicles, Passenger Vehicles, and Jaguar Land Rover divisions since 2021. Chairman N Chandrasekaran emphasized that the demerger aligns with Tata Motors’ vision to seize market opportunities, foster agility, and maximize shareholder value. The demerger process, to be executed through an NCLT scheme of arrangement, is subject to approvals from the TML Board of Directors, shareholders, creditors, and regulatory bodies. Although expected to take 12-15 months, the restructuring is projected to have no adverse effects on employees, customers, or business partners.
