Tata Motors to spin-off business into two separate listed entities, demerger to take 12-15 months

Tata Motors announced a significant restructuring move as it embarks on a major overhaul, with plans to split the company into two separate listed entities. The restructuring will see the conglomerate dividing its operations into distinct units, with one focused on commercial vehicles and the other on passenger vehicles and electric vehicles (EVs).

This demerger, aimed at streamlining operations and enhancing focus on specific market segments, will be executed through the National Company Law Tribunal scheme of arrangement. Notably, passenger vehicles and EVs were already operating under different segments, but this move marks a fresh reset for the company's organizational structure.

According to an exchange filing by Tata Motors, the demerger process is expected to take approximately 12-15 months, subject to necessary approvals from the NCLT. The company emphasized that it is currently awaiting these approvals before proceeding further with the restructuring.

Under the new structure, both resulting companies will be listed separately, providing investors with distinct investment opportunities in the commercial vehicle and passenger vehicle/EV segments. Importantly, all shareholders of Tata Motors will hold identical shareholdings in both entities, ensuring equitable distribution of ownership across the split.

The company said the move will not adversely affect staff, customers or operations as it works towards this overhaul.

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