Tata Motors shares drop 40% as stock trades ex-demerger
Shares of Tata Motors plunged nearly 40% in early trade on Tuesday, opening at ₹399 compared to Monday’s close of ₹660.90. The sharp fall, however, is not due to a market crash or poor performance, but a technical adjustment following the company’s demerger of its commercial vehicle business.
The automaker’s stock began trading ex-demerger, meaning that for every share of Tata Motors held on the record date, investors will receive one share of the new commercial vehicle entity, Tata Motors Commercial Vehicles (TMLCV). The price drop reflects the separation of that division’s value from the main company, not a loss of investor wealth, News.Az reports, citing Indian media.
After the adjustment, Tata Motors’ market capitalization stood at approximately ₹1.45 lakh crore.
Monday, October 13, was the last day to purchase shares to qualify for the demerged company’s stock, with Tuesday serving as the record date. Under the T+1 settlement cycle, transactions are completed the next trading day.
New derivative contracts for Tata Motors Passenger Vehicles Limited (TMPVL) began trading Tuesday morning, while the commercial vehicle unit’s shares will be listed separately on BSE and NSE within 45–60 days after regulatory approval.
Brokerage SBI Securities had earlier projected Tata Motors’ post-demerger share price to trade between ₹285 and ₹384, noting that future performance will depend on Jaguar Land Rover (JLR) and the profitability of the passenger vehicle segment.
The demerger aims to unlock value and improve operational focus between the company’s two key businesses — passenger and commercial vehicles. Analysts say the 40% drop visible on trading apps is purely an accounting adjustment, not a sign of fundamental weakness.
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