Tata Motors will split its passenger and commercial vehicle businesses on October 1.
The listing of the separated entities is expected between mid-October and November.
The tentative record date for demerge is October 14, 2025, with shareholders receiving one TMLCV share for each Tata Motors share.
Tata Motors is all set to split its passenger vehicle (PV) and commercial vehicle (CV) businesses tomorrow (October 1) after receiving all the necessary regulatory approvals. In a meeting with market analysts, the Tata Sons company also suggested that the listing of the separated entities on the stock market will take place between mid-October and November.
JM Financial in a note said that the demerger will have the tentative record date of October 14, 2025. Under the scheme first revealed in March 2024, shareholders of Tata Motors will get one share of TML Commercial Vehicles Ltd (TMLCV) for each stock they hold.
While analysts say the demerger will “enhance focus and unlock long-term value” for the carmaker, the company also faces headwinds like the recent Jaguar Land Rover cyberattack which paused production for a month, tariff-led slowdown for exports to the US, and demand weakness in key regions like Europe and China.
Why Tata Motors is Splitting PV, CV Units?
Last year, when Tata Motors first announced the demerger of the business, it claimed that “limited synergies exist between CV and PV.”
The demerger, it said, will allow them “to pursue their growth trajectory with greater agility and accountability.” It added that CVs are cyclical, linked to infrastructure, freight, mining, and construction, while PVs are growth-oriented, technology-heavy, and consumer-facing. Further, both have been operated by different CEOs since 2021.
“This demerger will help us better capitalise on market opportunities by enhancing focus and agility,” N Chandrasekaran, chairman, Tata Sons had said at the time.
Tata Motors’ passenger vehicle arm generated ₹48,445 crore in revenue in FY25, contributing 11% of consolidated revenue, with annual volumes of 5,56,367 units. Its electric vehicle business, which has sold over 200,000 units to date, posted ₹8,187 crore in revenue and annual volumes of 64,269 units in FY25. Meanwhile, the commercial vehicle division contributed ₹75,055 crore in revenue, or 17% of consolidated revenue.
Brokerages noted that the company would most likely list its PV unit in October followed by the CV unit in November.
What Happens After Demerger?
The company management has told analysts that in the PV segment Tata Motors (TTMT) is outpacing industry booking growth (25% vs 20% YoY) as Goods and Services Tax (GST) rationalisation brought down the prices of several of its entry-level models.
Earlier, the industry had seen a massive dip between August 15 (when PM Narendra Modi first announced GST reform) and September 22 (when it was implemented). Industry volumes were flat in first half of FY26; GST rate cuts are expected to drive 7–8% growth in second half.
The company also claimed that it is benefiting from shifting customer preference towards higher-end models, strong CNG sales, and rising EV momentum. Nearly 45% of PV sales now come from CNG and EVs.
Tata Motors is targeting 20% PV market share in the medium term with improved margins via richer mix and cost control.
In the CV segment, Tata Motors expects mixed benefits from GST cuts, with low-tonnage vehicles gaining the most as fewer customers claim Input Tax Credit (ITC). Management maintains flat or slightly negative CV growth in 1H, FY26, followed by double-digit growth in 2H, supported by GST cuts and recovering infrastructure demand.
According to brokerages, GST reductions will also lower fleet operating expenditure by 1–2%, aiding profitability and potential fleet expansion, while improved household consumption is set to lift freight demand.
JM Financial explained that in HCVs, where nearly 60–70% of customers are B2B and avail ITC, the impact is relatively muted. In contrast, ILCVs (40%), buses (5%), and SCVs (18%) see a more significant share of non-ITC-taking buyers, making these segments more sensitive to GST cuts.
“Interestingly, the greatest positive impact is expected in smaller vehicle categories, where a higher proportion of end-users benefit directly from reduced costs. Additionally, GST reduction on components like tyres and consumables could help lower operating expenses by 1–2%, thereby providing a modest boost to fleet operators’ margins,” the brokerage noted.
It added that the GST revisions provide a tailwind for profitability, particularly in the domestic SCV and ILCV segments.
JLR Operation Back Online, but Issues Remain
In the meantime, Tata Sons told stock exchanges yesterday that it is resuming operations in its UK subsidiary Jaguar Land Rover (JLR) in a “phased” manner. The unit was hit by a cyberattack in August which some local reports claimed impacted over £2 billion in revenue.
“Today we are informing colleagues, retailers and suppliers that some sections of our manufacturing operations will resume in the coming days,” a spokesperson said.
Motilal Oswal on Tuesday noted that during the one-month operation halt JLR’s retail sales held up due to inventory, though wholesales slowed. The shutdown also created near-term working capital needs.
“However, given that the production was shut for almost one month, JLR would need immediate near-term working capital to ensure that its supply chain is up and running in this time,” said the brokerage.
But it added that the UK government has indicated that it would provide loan guarantees worth £1.5 billion to JLR.
“JLR is likely to continue the liquidity support for a few more quarters until production is up and running normally. The forensic examination is underway at the moment and till it is concluded, management has refrained from giving out details on the matter given the sensitive nature of the event,” it noted.
Meanwhile, JM Financial said that going forward, the focus remains on how quickly JLR can scale up production, adding “the management stated it is currently difficult to quantify the exact impact.”
The company also faces a 15% tariff on European imports and 10% on UK imports of cars.
“In terms of demand, management indicated that the US continues to be resilient and China will also hold up. While the UK has remained stable, demand in Europe has seen some initial signs of recovery in August,” said Motilal Oswal.
