Tata Motors to Split Commercial and Passenger Vehicles Businesses
ECONOMY & POLICY

Tata Motors to Split Commercial and Passenger Vehicles Businesses

In a significant move aimed at enhancing strategic focus and agility, the Board of Directors of Tata Motors Limited (TML) has given the green light to a proposal for the demerger of Tata Motors Ltd into two separate listed companies. This decision, made during a meeting held on Monday, entails housing the Commercial Vehicles (CV) business and its related investments in one entity, while the Passenger Vehicles (PV) businesses, including PV, EV, and Jaguar Land Rover (JLR), along with their related investments, will form another entity.

The demerger, which will be implemented through a National Company Law Tribunal (NCLT) scheme of arrangement, ensures that all shareholders of TML will maintain identical shareholding in both listed entities.

Over recent years, Tata Motors' CV, PV+EV, and JLR businesses have demonstrated robust performance, operating independently under their respective CEOs since 2021. The demerger aligns with the logical progression of earlier subsidiarisation efforts in 2022, aimed at empowering the PV and EV businesses. It is anticipated to bolster the ability of each business to pursue its distinct strategies for achieving higher growth with greater agility, while reinforcing accountability.

Tata Motors Chairman N Chandrasekaran emphasized the rationale behind the demerger, stating, ?Tata Motors has scripted a strong turnaround in the last few years. This demerger will help them better capitalise on the opportunities provided by the market by enhancing their focus and agility. This will lead to a superior experience for our customers, better growth prospects for our employees, and enhanced value for our shareholders.?

While limited synergies exist between CV and PV businesses, substantial synergies are anticipated across PV, EV, and JLR, particularly in the domains of electric vehicles (EVs), autonomous vehicles, and vehicle software. The demerger is expected to facilitate the harnessing of these synergies more effectively.

The NCLT scheme of arrangement for the demerger will undergo approval by the TML Board of Directors in the coming months and will be subject to necessary shareholder, creditor, and regulatory approvals, a process estimated to take a further 12-15 months to complete. However, the company assures stakeholders that the demerger will have no adverse impact on employees, customers, or business partners.

The decision reflects Tata Motors' commitment to strategically position its businesses for sustained growth and innovation, ensuring that each entity can capitalize on emerging opportunities in the automotive sector while delivering enhanced value to stakeholders.

In a significant move aimed at enhancing strategic focus and agility, the Board of Directors of Tata Motors Limited (TML) has given the green light to a proposal for the demerger of Tata Motors Ltd into two separate listed companies. This decision, made during a meeting held on Monday, entails housing the Commercial Vehicles (CV) business and its related investments in one entity, while the Passenger Vehicles (PV) businesses, including PV, EV, and Jaguar Land Rover (JLR), along with their related investments, will form another entity. The demerger, which will be implemented through a National Company Law Tribunal (NCLT) scheme of arrangement, ensures that all shareholders of TML will maintain identical shareholding in both listed entities. Over recent years, Tata Motors' CV, PV+EV, and JLR businesses have demonstrated robust performance, operating independently under their respective CEOs since 2021. The demerger aligns with the logical progression of earlier subsidiarisation efforts in 2022, aimed at empowering the PV and EV businesses. It is anticipated to bolster the ability of each business to pursue its distinct strategies for achieving higher growth with greater agility, while reinforcing accountability. Tata Motors Chairman N Chandrasekaran emphasized the rationale behind the demerger, stating, ?Tata Motors has scripted a strong turnaround in the last few years. This demerger will help them better capitalise on the opportunities provided by the market by enhancing their focus and agility. This will lead to a superior experience for our customers, better growth prospects for our employees, and enhanced value for our shareholders.? While limited synergies exist between CV and PV businesses, substantial synergies are anticipated across PV, EV, and JLR, particularly in the domains of electric vehicles (EVs), autonomous vehicles, and vehicle software. The demerger is expected to facilitate the harnessing of these synergies more effectively. The NCLT scheme of arrangement for the demerger will undergo approval by the TML Board of Directors in the coming months and will be subject to necessary shareholder, creditor, and regulatory approvals, a process estimated to take a further 12-15 months to complete. However, the company assures stakeholders that the demerger will have no adverse impact on employees, customers, or business partners. The decision reflects Tata Motors' commitment to strategically position its businesses for sustained growth and innovation, ensuring that each entity can capitalize on emerging opportunities in the automotive sector while delivering enhanced value to stakeholders.

Next Story
Real Estate

AI makes the project workflow efficient

With a heritage spanning seven decades and footprint across seven countries, the BCD Group with expertise in construction, engineering, funding and consultancy is committed to building a better, more sustainable world for future generations. Vivek Joshi, Chief Strategy Officer, BCD Group, discusses the company’s projects, barriers to the usage of green steel and green cement, the role of software in project monitoring, etc, in conversation with R SRINIVASAN. Excerpts:What is the difference in projects in Tier 2-3 cities and in Mumbai?The major differences are:Market dynam..

Next Story
Technology

AI is revolutionising human capital strategy optimisation

The HR professional's passion for her job shines through when she says, "Sometimes you choose your journey and it becomes your passion and that’s how I started my HR journey. So far it has been interesting, learning through diversified cultures and industries. Every organisation and role has made me learn more about myself and the people we work with. Socomec has its own unique value driven culture and we are all set to evolve to take up a larger market share. So it is enthralling for me to drive the people and culture vision for a Greater India."What are the current best practices in induct..

Next Story
Infrastructure Transport

The Delhi-Dehradun Motorway will reduce commute time by half

The Delhi-Dehradun expressway's fourth segment, which would improve connectivity, is expected to open by May 2025. Saharanpur will be used in this project to connect two roads. Instead of five hours, a two-hour journey time is what is expected. This motorway will save fuel, lessen traffic, enhance connectivity between the two cities, and save time. It is projected that the project will cost Rs. 130 billion. On the motorway, light cars are permitted to go up to 100 kmph. After NH44, the longest highway spanning from north to south, this will be the second motorway, including a wildlife protec..

Hi There!

Now get regular updates from CW Magazine on WhatsApp!

Click on link below, message us with a simple hi, and SAVE our number

You will have subscribed to our Construction News on Whatsapp! Enjoy

+91 81086 03000

Join us Telegram