Last Updated:
The commercial vehicle business of Tata Motors is going to be listed on BSE and NSE on 12th November. This is part of the company’s larger re-structuring plan under which passenger and commercial vehicle units have been separated. This step will give both business units an opportunity to focus on their respective markets and will increase expectations of new value creation for investors.
New Delhi. The wait of investors who were waiting for split shares after demerger in Tata Motors is about to end. Shares of Tata Motors’ commercial vehicle business will be listed on the stock exchange on November 12. According to the notice issued by the Bombay Stock Exchange (BSE), the commercial vehicle unit of Tata Motors Limited, which has now become TML Commercial Vehicles Limited, will officially get approval for trading on that day. This means that the re-structuring process of the company has now reached its final stage.
Actually, Tata Motors had announced to divide its business into two different parts only a few months ago. Under this demerger, the company decided that its commercial vehicle segment and its related investments will be kept in a separate company, while the passenger vehicle unit which includes EV (Electric Vehicle), PV (Passenger Vehicle) and JLR (Jaguar Land Rover), will be part of another company.
Only 12 will get shares
Investors of Tata Motors have been given shares in the new company in the ratio of 1:1. This means that if someone had 10 shares of Tata Motors, then now he will also get shares in Tata Motors Commercial Vehicles Limited. Even though these shares have been allotted to the investors, their trading will take place only on November 12 and only then they will be visible in the demat account.
What is the purpose of re-structuring
Tata Motors had described this demerger as part of its “focused growth strategy”. The company believes that by creating separate business units, the leadership teams of both the segments will get an opportunity to focus more on their respective markets and technology. While innovation and digitalization are increasing rapidly in the passenger vehicles and EV segments, the demand for infrastructure and transport is continuously increasing in the commercial vehicle sector.
Listing of new shares and eyes of investors
TMLCV Ltd will now trade on both BSE and NSE. The company’s passenger vehicle segment has already started trading as a separate unit from October 14. Investors are now keeping a close eye on the listing of shares of the commercial vehicle company, as this is expected to unlock the value of both the companies.
New era for Tata Motors
This step is being considered as the beginning of a new era for Tata Motors. The company now wants to grow both its businesses – passenger and commercial – with different strategies. Market experts say that this demerger will not only increase transparency but will also open new opportunities for value creation for investors.
