Tata Motors , a leading Indian automotive manufacturer, has completed a significant corporate restructuring, marking a new chapter in its business operations. The company's passenger vehicle business will now trade under a new name, reflecting the separation of its commercial and passenger vehicle segments.

Key Highlights of the Demerger

• New Trading Name: Tata Motors Passenger Vehicles (TMPV)
• Effective Date: October 24, 2023
• Demerger Record Date: October 14, 2023
• Share Entitlement Ratio: 1:1

Business Separation Details

The demerger, which became effective on October 1, 2023, splits Tata Motors into two independent listed entities:

Shareholder Impact

Shareholders of Tata Motors will receive one share in the commercial vehicle company for every Tata Motors share held as of the record date. This 1:1 share entitlement ensures that existing shareholders maintain their stake in both resulting entities.

Stock Price Adjustment

Following the record date, Tata Motors' stock price experienced a significant adjustment:

• Price Drop: Nearly 40%
• Reason: Technical adjustment post-demerger
• Implication: The entities are now valued independently

Future Outlook

The commercial vehicle arm is expected to be listed separately, pending final regulatory clearances. This strategic move aims to allow each business to focus on its core competencies and pursue independent growth strategies.

The demerger and renaming process mark a pivotal moment for Tata Motors, potentially setting the stage for more focused operations and tailored strategies in both the commercial and passenger vehicle segments. Investors and market watchers will be keen to observe how this restructuring impacts the performance and valuation of both entities in the coming months.

Tata Motors , one of India's leading automobile manufacturers, faces a mixed scenario with recent sales success overshadowed by concerns related to its Jaguar Land Rover (JLR) subsidiary.

S&P Outlook Update

S&P has updated Tata Motors' passenger vehicle outlook to negative due to slow recovery at Jaguar Land Rover following a cyber attack. The rating agency predicts Tata Motors' cash flow from passenger vehicles will drop due to ongoing operational issues at JLR. S&P warns the cyber attack at JLR may last longer than expected, affecting Tata Motors' credit metrics for an extended period.

Despite the negative outlook, S&P confirmed Tata Motors' 'BBB' rating and maintained JLR's 'BBB-' rating unchanged.

Record-Breaking Festive Season Sales

In contrast to the challenges faced by JLR, Tata Motors reported a remarkable performance during the recent festive season in India. The company delivered more than 1 lakh vehicles in a 30-day period spanning from Navratri to Diwali, marking a significant 33% growth compared to the same period last year.

Strong SUV and EV Demand Drives Growth

The surge in sales was primarily driven by robust demand for SUVs and electric vehicles (EVs). Here's a breakdown of the key performers:

The Nexon SUV emerged as the standout performer, with over 38,000 units delivered, representing a substantial 73% increase year-over-year. The Tata Punch also showed strong results, with 32,000 units delivered, reflecting a 29% growth.

Electric Vehicle Success

Tata Motors' commitment to electric mobility is evident in its impressive EV sales. The company's electric vehicle portfolio, which includes models like the Nexon EV and Tigor EV, saw deliveries exceeding 10,000 units during the festive period. This represents a 37% year-on-year growth, underscoring the increasing acceptance of electric vehicles in the Indian market.

Management's Perspective

Shailesh Chandra, Managing Director and CEO of Tata Motors Passenger Vehicles Ltd. and Tata Passenger Electric Mobility Ltd., commented on the achievement, describing it as a landmark milestone. He emphasized that this performance establishes a strong foundation for the remainder of the fiscal year.

Future Outlook

While Tata Motors' domestic performance remains strong, the company faces challenges due to the JLR situation. The impact of the cyber attack on JLR operations and the subsequent negative outlook from S&P highlight the need for the company to address these issues promptly.

Looking ahead, Tata Motors appears to have a mixed outlook. While the domestic market shows promise, with strong sales in the SUV and EV segments, the company will need to navigate the challenges at JLR to maintain its overall financial health and credit ratings.

This contrasting scenario demonstrates the complex nature of Tata Motors' operations, balancing strong domestic performance against international challenges.