Tata Motors' commercial vehicle arm lists at premium post demerger

Shares of Tata Motors' commercial vehicle business, now officially listed as Tata Motors, made a strong debut on Wednesday, following its demerger from the passenger vehicle division.

The stock opened at Rs 335 per share on the NSE, significantly higher than its discovered price of Rs 260.75, while on the BSE, it debuted at Rs 330.25, marking a 26.1% premium over the implied price of Rs 261.90.

As of the latest trade, Tata Motors shares were hovering around Rs 328.15 on the NSE and Rs 328.50 on the BSE, sustaining gains of over 25% from the discovered price.

The listing marks a key milestone for the automaker, which recently split its commercial and passenger vehicle businesses into two independently listed entities to sharpen focus and unlock shareholder value. The commercial vehicle arm, comprising Tatas truck, bus, and heavy vehicle operations, will continue under the Tata Motors name, while the passenger vehicle business now operates as Tata Motors Passenger Vehicles Ltd (TMPVL).

Effective October 1, the demerger separates Tata Motors fast-growing passenger vehicle and EV segment from its stable, cash-generating commercial vehicle business, enabling investors to assess each entity based on its individual performance. Shareholders received one share of Tata Motors CV for every Tata Motors share held, with no dilution of ownership. The record date for eligibility under the scheme was October 14, when the passenger vehicle shares were discovered at Rs 400 apiece.

The markets strong response reflects optimism about a cyclical upturn in the commercial vehicle sector, aided by government infrastructure spending and improving fleet demand. The separation is also expected to help both businesses pursue focused strategies, attract sector-specific investors, and enhance operational efficiency.

Meanwhile, Tata Motors Passenger Vehicles shares were trading at Rs 403.70 on the BSE and Rs 403.95 on the NSE, posting marginal gains since the demerger adjustment in October.

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