Tata Motors demerger countdown: Shares dip nearly 7%; how will the demerger affect your holdings?

Tata Motors’ shares fell 6.8% over the past four sessions to touch Rs 689.3 on the BSE on Wednesday, slipping below the Rs 700 mark as investors awaited the record date for the company’s upcoming demerger. The decline comes amid market anticipation of the separation of its commercial and passenger vehicle businesses, alongside the phased restart of production at its UK-based luxury arm, Jaguar Land Rover (JLR), following a cyber incident, according to an ET report.JLR resumed its manufacturing operations from October 8 after a disruption in early September. The company also announced a new financing solution to support supplier cash flows as vehicle production gradually returns to normal.Tata Motors is undertaking a 1:1 demerger that will create two independent listed entities: TML Commercial Vehicles and Tata Motors Passenger Vehicles, which will include JLR. The company has fixed October 14, 2025, as the record date for determining eligible shareholders for the 1:1 share allotment. Under the scheme, shareholders holding one fully paid-up Tata Motors share (face value Rs 2) will receive one fully paid-up TMLCV share of the same face value.In addition, October 10, 2025, is set as the record date for identifying eligible debenture holders whose Non-Convertible Debentures (NCDs) worth Rs 2,300 crore will be transferred to TMLCV as part of the restructuring. Post-demerger, the equity shares of TMLCV are proposed to be listed on both BSE and NSE, subject to regulatory approvals.SAMCO Securities said shareholders holding Tata Motors stock as of the record date will receive shares in both entities at the specified ratio. “The share price of Tata Motors will adjust on the ex-date, October 14, 2025, to reflect the new corporate structure,” the report noted. Once listed, investors will see shares of Tata Motors Passenger Vehicles and TML Commercial Vehicles credited to their demat accounts, though overall portfolio value will remain unchanged initially.Traders in Futures & Options (F&O) and Margin Trading Facility (MTF) will face restrictions from October 8. New F&O or MTF buy positions in Tata Motors cannot be created during this period to prevent sharp volatility, though existing positions can still be managed or squared off. Normal trading will resume once the demerger process concludes.SAMCO Securities advised investors to follow official announcements from Tata Motors and avoid new leveraged positions in F&O or MTF until restrictions are lifted. Shareholders can review their portfolios once both entities are listed to make necessary adjustments.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)