This was being expected for long but couldn’t happen before as individual businesses were not stabilised and needed to support each other.
Finally, given Tata Motors’ (TML) significant turnaround across businesses in the last 2-3 years, it is separating the Commercial Vehicles (CV) and Passenger Vehicles (PV) businesses.
- all the CV business and its related investments will be in one entity
- the PV businesses including PV, EV, JLR and it’s related investments will be in another entity
- the shareholders of TML shall continue to have the identical shareholding in both the listed entities
- demerger process is expected to take 12-15 months to complete
Not much is expected to change operationally due to the announced demerger as anyways since 2021, these businesses (CV, PV+EV, JLR) have been operating independently under their respective CEOs.
However, yes, being listed separately will make them more accountable; investors will get more clear information and hence can pick and choose the business that they like.