The board of Tata Motors has approved the demerger of commercial vehicle business into TML Commercial Vehicles Limited, and announced that the passenger vehicles businesses including PV, EV, JLR and related investments in another entity, the company informed stock exchanges in a filing on August 1.
The demerger would result in creation of two listed companies with mirror shareholding, one housing the CV business and the other amalgamated company housing the PC business, the company said.
The demerger will be implemented through an NCLT scheme of arrangement and all shareholders of Tata Motors shall continue to have identical shareholding in both the listed entities, the carmaker had said in March when the scheme was first announced.
The scheme will enable respective businesses to pursue differentiated strategies with agility, and enhance value for the shareholders, Tata Motors has said.
The scheme is subject to approval of shareholders, creditors, National Company Law Tribunal, and other authorities.
This demerger is also aimed to enhance synergies across PV and EV business along with JLR, particularly in the areas of EV, autonomous vehicles, and vehicle software.
"The proposed demerger will help us improve focus and make us more
agile to capitalise on opportunities in the CV market globally. Our focus will
be to create a world-class Company operating in the CV space", Girish Wagh, ED, Tata Motors had said in the 2024 annual report of the company.
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