<p>On Monday, March 4, Tata Motors said that the plan to divide the firm into two distinct listed companies has been accepted by the board of directors. The firm will be able to narrow its emphasis on the passenger and electric vehicle sectors thanks to the demerger, which will be carried out via an NCLT scheme of arrangement in the next few months.</p>
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<p>According to a statement from Tata Motors, the passenger vehicle (PV) companies, which include electric cars, Jaguar Land Rover, and associated investments, would be split into two separate entities: the PV business and its investments, and the commercial vehicle company.</p>
<p>It was also said that every shareholder of Tata Motors Ltd. (TML) would maintain the same percentage of shares in both listed companies.</p>
<p>“Tata Motors said that the demerger will further empower the respective businesses and is a logical progression of the subsidization of PV and EV businesses done earlier in 2022.”</p>
<p>According to the statement, the NCLT plan of arrangement for the demerger will be presented to the TML Board of Directors for approval in the next few months. It will also need the requisite approvals from shareholders, creditors, and regulators, which may take an additional 12 to 15 months to complete.</p>
<p>“Tata Motors has scripted a strong turnaround in the last few years,” said N Chandrasekaran, Chairman of the Tata Group. As of right now, the three automobile business divisions are running separately and producing results that are reliable. Their concentration and agility will be improved by this demerger, which will enable them to better take advantage of the possibilities presented by the market.</p>
<p>He went on to say that this would result in improved development opportunities for our staff, a better customer experience, and more value for our shareholders.</p>
<p>On the BSE, Tata Motors’ shares finished at Rs 987.2 each on Monday, down Rs 1.20 or 0.12% from the previous close.</p>
The proposal to split Tata Motors into two distinct companies has been approved by the board
