Tata Motors shares trade flat after demerger; commercial vehicle entity likely to be listed in November

Tata Motors Limited’s (TML) demerger record date was today, i.e., October 14, while its demerger has been effective since October 1. Share price of the demerged passenger vehicle entity had been decided in a special pre-open trading window, where the Tata Motors Passenger Vehicle share price began trading at ₹400 per share on NSE and at ₹399 per share on the BSE.

As of now, the shares are trading at its discovery price of ₹400, after seeing a spike of 4% intraday.

As per an exchange filing, the company said that TML shall continue to be a listed entity. Tata Motors Limited shall change its name to Tata Motors Passenger Vehicles Limited and shall carry on the passenger vehicles business including its investments in Electric Vehicle business and Jaguar-Land Rover.  TML Commercial Vehicles Limited shall be renamed as Tata Motors Limited.

The company has not announced the date of listing for the commercial entity yet, but said that the process of obtaining listing and trading permission generally takes 45-60 days, thereby, the stocks would be available to trade in mid-November.

The automotive company had announced in August last year about its 1:1 demerger, which will create two focused entities, Tata Motors Commercial Vehicles (TMLCV) and Tata Motors Passenger Vehicles (TMPV). The move was aimed to sharpen business focus and capitalise on future growth opportunities.

Tata Motors demerger share entitlement ratio is 1:1, where Tata Motors shareholders will be issued and allotted one equity share of face value of ₹2 each fully paid up in the commercial vehicle entity or TML Commercial Vehicles Limited, for every one share of face value of ₹2 each fully paid up held in Tata Motors as on the record date.