Tata Motors demerger: truck and bus company valued at Rs 260.75 per share

Tata Motors’ commercial vehicles business, which includes trucks and buses, has been valued at around Rs 260.75 per share after the company’s much-anticipated demerger. The figure is derived from the pre-demerger closing price of Rs 660.75 and the opening price of Rs 400 for the parent company, now renamed Tata Motors Passenger Vehicles Ltd, and reflects the face value assigned to the demerged unit.

October 14 marked the record date for the separation of Tata Motors’ passenger and commercial vehicle businesses. Shareholders who owned shares before October 14 are entitled to one share of Tata Motors Commercial Vehicles Ltd (TMLCV) for each share held. TMLCV will be listed separately on the National Stock Exchange and BSE once regulatory approvals are completed, with the shares credited to demat accounts within 30 to 45 days.

The parent company now includes passenger cars, electric vehicles and Jaguar Land Rover businesses. All existing futures and options contracts expiring in October, November and December were settled on Monday and will resume with revised lot sizes.

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Analysts weigh in

Brokers said the split allows for clearer valuation of the company’s separate businesses. Nomura valued the passenger and commercial units almost equally – Rs 367 for Tata Motors Passenger Vehicles (TMPV) and Rs 365 for TMLCV – while warning of ‘technical risk to the share price’ as the shares trade ex-split. The broker noted that index weight adjustments could lead to volatility in the short term.

SBI Securities expected TMPV to trade between Rs 285 and 384 post-demerger, with the potential upside linked to JLR’s volume recovery and profitability. For TMLCV, the brokerage forecast a range of Rs 320-470, taking into account the planned €3.8 billion acquisition of Iveco Group NV’s commercial vehicle business.

YES Securities described the separation as an “opportunity to unlock value,” noting that pure-play passenger and commercial vehicles allow investors to focus on different cars. Bonanza Research analyst Khushi Mistry said the split “will lead to a sharper business focus for both entities.”Also read | Nomura values ​​Tata Motors’ passenger and commercial arms almost equally, signaling near-term volatility post-demerger

Outlook for each unit

TMLCV enters the market as India’s largest commercial vehicle manufacturer, with a market share of 37.1% and an EBITDA margin of 12.2% in Q1FY26, despite sales declines. The unit is expected to benefit from a planned €3.8 billion acquisition of Iveco Group NV’s commercial vehicle business, which is expected to triple combined revenues and increase exposure to electric and alternative fuel engines.

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TMPV, which derives 87% of sales from Jaguar Land Rover, is expected to grow by 8 to 10% in the second half of FY26, supported by new launches, strong SUV positioning and rising demand for EVs and CNG, which account for 45% of passenger car sales. Analysts noted that JLR’s phased restart of production following a cyber attack in September will impact sentiment, although early reports suggest the impact at the retail level was limited.

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