Tata Motors demerger: Record date on October 14, stock crashes over 9% in 5 sessions. What next for investors? – News Air Insight

Tata Motors shares continued their downward trajectory on Thursday, slipping for the fifth consecutive session ahead of the company’s crucial demerger record date on October 14. The stock has corrected 9.5% over the past five trading days, hitting a low of Rs 669 on the BSE, as investors brace for operational and structural shifts tied to the separation of its business verticals.

The upcoming 1:1 demerger will result in the formation of two distinct listed entities, Tata Motors Passenger Vehicles and TML Commercial Vehicles, with shareholders receiving one fully paid-up share of TMLCV for every share held in Tata Motors.

The move aims to segregate the company’s commercial and passenger vehicle divisions, including electric vehicles and the Jaguar Land Rover (JLR) business, into independent units with sharper operational focus.

Saurabh Jain, Head of Fundamental Research at SMC Global Securities, said the recent market correction reflects “profit booking and short-term uncertainty” surrounding the restructuring.

“Strategically, the split aims to sharpen operational focus and unlock value, enabling each entity to pursue independent growth and attract more suitable valuations,” Jain added. He also noted that clarity in structure could lead to stronger long-term value creation for shareholders

Adding to the volatility, all Futures & Options (F&O) contracts of Tata Motors expiring in October, November, and December will now end early on October 13, with compulsory physical settlement at that day’s closing price.Trading restrictions have also been placed on new positions in F&O and Margin Trading Facilities (MTF) starting October 8, as exchanges look to curb sharp price movements ahead of the demerger.The demerger also includes the transfer of Rs 2,300 crore worth of Non-Convertible Debentures (NCDs) to TMLCV, for which the record date has been set as October 10, 2025.

Shares of both the new entities are proposed to be listed on BSE and NSE, subject to regulatory approvals.

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While the near-term trend has turned cautious, with the stock under pressure in the lead-up to the record date, analysts suggest that the creation of two focused companies may allow for clearer value discovery in the long run.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)