Tata Motors Demerger — All you need to know from record date to listing timelines

Tata Motors Ltd

., the passenger and commercial vehicles manufacturer, has announced in its analyst meet that the record date for the demerger of its Commercial Vehicles business will be fixed for mid-October, while the listing of the business will take place in November.

In August last year, Tata Motors had approved the demerger of its Commercial Vehicles business into a separate listed entity. Shareholders will be entitled to receive one share of the demerged entity for every one share that they own of the currently listed share of Tata Motors.

During its analyst meet on Monday, Tata Motors has highlighted that the demerger process remains on track and that it has received approval from the National Company Law Tribunal (NCLT).

The demerger takes effect from Wednesday, October 1. Record date will be mid-October, subject to approval from the Registrar of Companies (RoC). The currently listed shares of Tata Motors will begin trading ex-CV business a day after the record date, and will subsequently be named Tata Motors Passenger Vehicles Ltd. (TMPVL).

After this, the demerged CV business will tentatively list in November as Tata Motors Ltd. (TML).

Brokerage firm Jefferies, in a note on Tuesday, wrote that while it remains positive on India's Passenger Vehicle demand, it sees numerous challenges for Jaguar Land Rover (JLR) and remain less convinced about the margin improvement for the Passenger Vehicles business and the Iveco acquisition.

Jefferies maintained its Underperform rating on Tata Motors with a price target of ₹575.

During the analyst meet, Tata Motors also highlighted that Jaguar Land Rover will resume production in a phased manner, but did not disclose a definitive timeline. JLR is currently undergoing a production halt until October 1, based on JLR's last publicly disclosed timeline. The company also added that the near-term demand outlook for JLR remains challenging across Europe, China and the US.

Shares of Tata Motors ended little changed on Monday at ₹674.