Tata Motors Demerger: Passenger and Commercial Vehicle Business Split Effective October 2025

Tata Motors Limited has announced that its much-anticipated business demerger will officially take effect from 1st October 2025, creating two separate listed entities to house its commercial vehicle (CV) and passenger vehicle (PV) operations respectively.

The National Company Law Tribunal (NCLT) Mumbai Bench sanctioned the Composite Scheme of Arrangement on 25th August 2025, with a rectification order issued on 10th September 2025. The certified copies of these orders were received by the company on 25th September and approved by the board on 26th September.

Under the approved scheme, the commercial vehicles business will be transferred to TML Commercial Vehicles Limited (TMLCV), which will be listed separately on the NSE and BSE. Meanwhile, the existing Tata Motors entity will retain the passenger vehicles business, including electric vehicles (EV), Jaguar Land Rover (JLR), and related investments. 

Strategic Rationale for the Split

The demerger represents a logical progression of Tata Motors' strategy to create focused business units. Since 2021, the CV, PV, and JLR businesses have operated independently under their respective CEOs, delivering distinct strategies and strong performance. 

Shailesh Chandra, who has been appointed as the new Managing Director and CEO of Tata Motors effective 1st October, will continue overseeing Tata Passenger Electric Mobility Limited whilst leading the combined PV operations. Girish Wagh will transition to become Managing Director and CEO of the new commercial vehicles entity.

The move enables each business to pursue independent value creation strategies with greater agility and accountability. Whilst there are limited synergies between CV and PV operations, significant synergies exist across PV, EV, and JLR, particularly in electric vehicles, autonomous vehicles, and vehicle software development.

The demerger proposal received overwhelming shareholder approval in May 2025, with 99.9995 percent of votes in favour. Both entities are expected to be listed separately on stock exchanges by the third quarter of the current financial year. 

N Chandrasekaran, Chairman of Tata Sons, stated that the demerger will help both entities "better capitalise on market opportunities by enhancing their focus and agility," leading to superior customer experience, better employee growth prospects, and enhanced shareholder value.