The October 14 record date marked the separation of Tata Motors’ passenger and commercial vehicle businesses. Shareholders who held Tata Motors stock before that date are eligible to receive one share of TMLCV for every share held. The company expects the new shares to be credited within 30–45 days, paving the way for a likely listing on the NSE and BSE by late November or early December.
With Tata Motors’ pre-demerger closing price at Rs 660.75 and the renamed Tata Motors Passenger Vehicles Ltd (TMPV) opening around Rs 400, the implied value for the yet-to-list CV arm stands near Rs 260.75 per share.
Brokerages and fund managers expect the listing to draw strong institutional interest, though they warn of sharp volatility as the market establishes a price for the newly independent entity.
What should Dalal Street expect?
Harshal Dasani, Business Head at INVasset PMS, said TMLCV “is likely to list above the implied Rs 260–Rs 270 valuation, with market chatter suggesting a potential opening in the Rs 300–Rs 350 range.” He said that “the initial sessions could see sharp swings of 10–20%, as institutional and retail participants recalibrate portfolios post-demerger and price discovery sets in.”
Dasani expects institutions to lead early trades. “Institutional interest is expected to dominate early trades, driven by dedicated industrial, logistics, and infrastructure-focused funds seeking India’s cyclical growth exposure. Retail appetite will follow once standalone financial clarity and debt allocation become visible,” he said.
Brokerages broadly agree that the split unlocks clearer valuation for Tata Motors’ two core businesses. ICICI Securities’ Pankaj Pandey said, “There should be value creation because what we are expecting for CV business is 11 times EV/EBITDA on FY27 basis, so that comes about Rs 300 odd because comparable peers are also getting similar multiples.”
Nomura has pegged fair values for TMPV and TMLCV almost equally, at Rs 367 and Rs 365, respectively, though it warned of “technical risk for the share price” as index adjustments and portfolio realignments play out in the near term. YES Securities called the separation a “value unlocking opportunity,” while Bonanza Research’s Khushi Mistry said the move “will lead to sharper business focus for both entities.”
Analysts bullish on CV arm
Brokerages including Ambit Institutional Equities see the CV unit as the bigger immediate beneficiary of the breakup. Ambit termed the spin-off “a separation of value and growth propositions,” adding that “the CV business is better positioned to capitalize on the demerger” due to its market leadership and steady cash generation. The brokerage sees “immediate value unlocking for CV,” with the residual TMPV price likely to settle near Rs 380.
SBI Securities estimated TMLCV’s fair value between Rs 320–470, factoring in both the core truck and bus business and the planned acquisition of Italy’s Iveco Group NV’s commercial vehicle operations for €3.8 billion. The Iveco deal, analysts say, could give Tata Motors’ CV arm the global scale and technology edge it has long sought.
Iveco deal seen as transformative
Abhinav Tiwari, Research Analyst at Bonanza, said the acquisition “could materially strengthen the medium term growth outlook.” According to him, “Iveco brings global scale, advanced technology, and diversified presence, while TMLCV adds cost-efficient manufacturing and a strong domestic base.”
Management expects Iveco to generate “robust Free cash flow and target 20% RoCE,” Tiwari noted, adding that the combined entity “will become the fourth largest player globally in the MHCV (>6 tonne) category.” With nearly three-quarters of Iveco’s revenue coming from Europe and a strong presence in Latin and North America, “a successful takeover could nearly triple commercial vehicle revenue from Rs 75,000 crore to over Rs 2 lakh crore,” he said.
Dasani of INVasset PMS called the Iveco deal “a strategic edge” against peers such as Ashok Leyland, Mahindra & Mahindra, and Eicher, though he cautioned that integration costs may pressure near-term margins. “If executed well, the deal could transform TMLCV into a globally competitive CV powerhouse,” he said.
CV cycle recovery adds tailwind
India’s commercial vehicle market appears poised for a steady uptrend. Tiwari said, “The Indian commercial vehicle sector is expected for steady uptrend in FY26–27, on the back of increasing construction activity, higher freight availability, and revival in replacement demand.”
Tiwari expects the CV industry to grow 3–5% in FY26, with medium and heavy commercial vehicles benefiting from higher infrastructure spending and light commercial vehicles supported by rising e-commerce activity. “Aging fleet and Government mandates will be the key drivers for replacement demand in the country, especially in the bus segment,” he added, highlighting that new regulatory upgrades such as mandatory AC cabins and wider adoption of CNG, LNG, and e-buses will further shape demand.
Shareholders face a bumpy near term
Analysts say the implied Rs 260-a-share value for the CV unit remains notional until listing begins, with early price discovery likely driven by institutional flows.
“The demerger does unlock structural value through sharper capital allocation and brand autonomy, though a part of it may already be reflected in Tata Motors’ adjusted valuations,” Dasani said.
As the Iveco deal takes shape and India’s truck cycle revs up again, investors will be watching whether Tata Motors’ commercial vehicle arm can shift gears from a domestic leader to a global contender.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)