Tata Motors split: CV arm awaits debut; listing date, price and what’s next for 67 lakh shareholders

The dust has barely settled on the long-awaited demerger of Tata Motors, but investors are now waiting for the next big milestone: the separate listing of the company’s commercial vehicles business. At an implied value of around Rs 260.75 per share, the truck-and-bus unit owns a significant chunk of shareholder wealth that remains temporarily out of reach until trading commences.

October 14 marked the record date for the separation of Tata Motors’ passenger and commercial vehicle businesses. Shareholders who owned Tata Motors shares before that date will receive one share of Tata Motors Commercial Vehicles Ltd (TMLCV) for each share held. The company expects the shares to be credited within 30 to 45 days, pending regulatory approvals, after which TMLCV will list separately on the NSE and BSE.

The implied value of Rs 260.75 for the CV business is derived from the pre-demerger closing price of Tata Motors of Rs 660.75 and the opening price of Rs 400 of the renamed parent, Tata Motors Passenger Vehicles Ltd (TMPV).

Unlocking value, but when?

Brokerages said the demerger will enable clearer valuation of Tata Motors’ separate businesses. “So overall, we feel there is value to be created because what we expect for CV business is 11 times EV/EBITDA on FY27 basis, so that works out to an odd rupee of Rs 300 as peers are also getting similar multiples,” said Pankaj Pandey of ICICI Securities.

“On the PV side, our feeling is that shares should be trading somewhere between 450 and 500, that’s the fair value that we see. So because it’s a vertical split of sorts and it’s one of the most anticipated splits, we feel like there should be some value creation overall because both PV and CV businesses offer different growth paths,” Pandey said.

Brokers are turning bullish on the CV arm

Nomura valued the passenger and commercial vehicles almost equally — Rs 367 for TMPV and Rs 365 for TMLCV — while warning of “technical risk to the stock price” as the shares trade ex-split. The broker noted that index weight adjustments could lead to volatility in the short term.

Ambit Institutional Equities described the spin-off as “a separation of value and growth propositions,” adding that the CV business is “better positioned to benefit from the demerger” given its market leadership, competitive margins and steady cash flow generation. Ambit said it expects “immediate value unlocking for CV”, with the price of the remaining listed entity likely to be around Rs 380 per share.

The brokerage added that the global reach and synergies of the planned €3.8 billion acquisition of Iveco Group NV’s commercial vehicle business would provide a “revaluation benefit”.

SBI Securities, meanwhile, 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.

Trucks, buses and a world game

TMLCV enters this new phase as India’s largest commercial vehicle manufacturer, with a market share of 37.1% and an EBITDA margin of 12.2% in Q1FY26, despite a recent sales decline. Analysts at Nomura said the Iveco acquisition could be transformative, tripling combined sales and increasing exposure to electric and alternative fuel engines.

Ambit noted that the CV business is “a consistent cash generator,” with positive free cash flow, unlike the passenger car division, which is still in an investment phase. The deal with Iveco would help Tata Motors “diversify away from domestic cyclicality” and “expand its global footprint in Europe and Latin America.”

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

What shareholders can expect

For now, shareholders can only wait for CV stock to debut – likely in late November or early December. Till then, the value of Rs 260 per share remains implied.

Analysts expect short-term volatility as the market recalibrates to the new structure. But brokers remain optimistic about the long-term story. As Ambit noted, the demerger “supports Tata Group’s broader agenda to streamline its corporate structure and enhance shareholder value through improved transparency and governance.”

For 67 lakh Tata Motors investors, that moment of ‘value unlocking’ may be just around the corner.

Also read | TCS and Tata Motors plummet to 42% from peak, wiping out more than Rs 4 lakh crore of Tata shares by 2025 amid boardroom turmoil

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