Tata Motors Completes Demerger: Commercial Vehicle Arm Lists at 28% Premium
Tata Motors Completes Demerger Commercial Vehicle Arm Lists at 28% Premium
Tata Motors’ long-awaited demerger of its Commercial Vehicle (CV) business has officially taken effect, marking a major milestone for the Indian auto giant. The newly formed Tata Motors Commercial Vehicles Ltd (TMLCV) made a strong debut on the stock market on November 12, 2025, with its shares listing at a significant premium.
The demerger, which became effective on October 1, 2025, separates the company’s passenger vehicle and commercial vehicle divisions, allowing investors to value each segment independently.
Key Takeaways On Tata Motors Demerger
- Listing Price: ₹335 per share on NSE, up 28.48% from the implied value of ₹260.75.
- Market Capitalisation: Combined market cap of Tata Motors’ two entities exceeds ₹2.7 lakh crore.
- Demerger Date: Effective from October 1, 2025, with a record date of October 14, 2025.
- Business Strength: CV arm reported FY25 revenue of ₹75,055 crore and EBITDA of ₹8,856 crore (11.8% margin).
- Valuation: Estimated ₹1.14 lakh crore, roughly ₹310–₹320 per share based on peer multiples.
- Symbol: Shares trade under ticker TMCVL on both NSE and BSE.
Tata Motors Demerger : Strong Market Debut for TMLCV
The listing of Tata Motors Commercial Vehicles Ltd received an enthusiastic response from investors. Shares opened at ₹335 on NSE and ₹330.25 on BSE, reflecting a premium of around 28% over their implied pre-demerger value. Post-listing, the stock climbed further to ₹345, showing strong investor confidence in the standalone business.
Analysts believe the demerger eliminates the “conglomerate discount,” enabling investors to take a focused position on India’s commercial vehicle upcycle backed by steady demand, infrastructure growth, and favorable policies.
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Financial Performance and Valuation
In FY25, the commercial vehicle business delivered ₹75,055 crore in revenue and ₹8,856 crore in EBITDA, resulting in a healthy 11.8% operating margin. Using Ashok Leyland’s EV/EBITDA multiple of 12.9x, analysts value the CV arm at approximately ₹1.14 lakh crore, equivalent to ₹310–₹320 per share.
This valuation highlights Tata Motors’ strong position in the domestic truck and bus market, supported by robust cash flows, operational efficiency, and export potential.
Tata Motors Demerger : Analyst Insights and Market Outlook
According to Jahol Prajapati, Research Analyst at SAMCO Securities, “The demerger separates the fast-growing passenger vehicle and EV segments from the stable, cash-rich CV business. This allows investors to value each entity on its own strengths.”
Harshal Dasani, Business Head at INVasset PMS, stated, “The listing gives investors a focused, India-centric opportunity aligned with the country’s infrastructure expansion and logistics growth. Some near-term volatility may occur as passive funds rebalance, but medium-term prospects remain positive.”
Brokerages like Ambit Institutional Equities and SBI Securities expect the move to unlock value and re-rate the commercial vehicle segment. Ambit highlighted that the CV business, with its market leadership and strong cash generation, is well positioned to benefit from the separation.
Global Expansion and Future Plans
TMLCV’s ongoing acquisition of Italy’s Iveco Group NV’s commercial vehicle operations, valued at €3.8 billion, is seen as a strategic move to strengthen its global footprint and technology base. Analysts believe this deal could transform Tata Motors into a major global player in the medium and heavy commercial vehicle segment over the long term.
The company is expected to benefit from rising freight demand, easing commodity costs, and supportive policy changes, making it a compelling long-term investment story.
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