Tata Motors demerger creates Rs 2.7 lakh crore powerhouse as combined value jumps 12% on listing

Tata Motors’ landmark demerger has immediately unlocked shareholder value, with the combined market capitalisation of its two new listed entities -- Tata Motors (commercial vehicles) and Tata Motors Passenger Vehicles (TMPVL) -- crossing Rs 2.7 lakh crore on Wednesday.

The newly listed commercial vehicle arm Tata Motors debuted at Rs 335 per share, a 28.5 percent premium to its discovered price of Rs 260.75. With this, the CV entity commands a market capitalisation of over Rs 1.2 lakh crore. Passenger vehicle arm Tata Motors Passenger Vehicles, which includes the company’s electric vehicle and Jaguar Land Rover (JLR) businesses, was trading at Rs 407.6, valuing it at more than Rs 1.5 lakh crore.

The combined price of both entities at Rs 742.6 in Wednesday opening trade is 12.4 percent higher than Tata Motors’ pre-demerger share price of Rs 660.75, signalling strong investor confidence in the group’s restructuring move.

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The demerger, effective October 1, 2025, created two focused listed companies: the cash-generating, steady-growth commercial vehicle arm and the faster-growing passenger and EV business. Each shareholder received one share of Tata Motors (CV) for every share held in the parent as of the record date, October 14.

Jahol Prajapati, Research Analyst at SAMCO Securities, said the separation allows investors to value each business on its own strength, adding that the passenger vehicle and EV operations have a more rapid growth trajectory, while the CV arm offers stable cash flows and cyclical resilience.

The demerger, approved by the company’s board in August last year and sanctioned by the NCLT Mumbai Bench, was aimed at sharpening strategic focus and enabling each business to pursue capital allocation independently.