Tata Motors shares gained momentum on Monday, breaking a five-day losing streak as investors gear up for the company's upcoming demerger. The stock climbed nearly 1% to Rs 686.20, reflecting renewed interest ahead of the October 14 record date for the separation of its passenger and commercial vehicle businesses.

Demerger Details

The Composite Scheme of Arrangement, which became effective from October 1, creates two independent entities:

1. Tata Motors Passenger Vehicles (TMPV): Encompassing PV, EV, and JLR businesses
2. TML Commercial Vehicles (TMLCV): Focusing on domestic CV operations

Shareholders will receive shares in both companies at a 1:1 ratio, with the record date set for October 14.

Key Points of the Demerger

Market Implications

The demerger is expected to have significant implications for Tata Motors' stock:

• Price Adjustment: On the record date, TML's share price will be adjusted to reflect the demerger of the commercial vehicles business through a price discovery mechanism on the stock exchanges.
• Temporary Trading Suspension: TMLCV shares will not be available for trading on stock exchanges from the date of allotment until they are listed, a process that typically takes 45-60 days.
• Unlocking Value: YES Securities anticipates that the split will unlock value by creating pure-play verticals, potentially benefiting shareholders in the long run.
• Increased Volatility: Analysts warn of potential increased volatility around the ex-date as the market adjusts to the new corporate structure.

Recent Challenges

The demerger comes at a time when Jaguar Land Rover, a key component of Tata Motors' passenger vehicle business, is gradually restarting production following a cyberattack in September. This incident resulted in:

• A 24% drop in wholesale volumes
• Estimated losses of £50 million per week

Technical Outlook

Despite the recent uptick, Tata Motors' stock remains below most key moving averages, with resistance noted at Rs 720. This technical positioning suggests that while the demerger news has provided some positive momentum, the stock may still face challenges in the near term.

Investors and market participants will be closely watching how the demerger unfolds and its impact on the valuation of both entities in the coming weeks. The success of this corporate action could set a precedent for other conglomerates considering similar restructuring moves in the Indian market.

Tata Motors , one of India's leading automotive manufacturers, is experiencing significant market movements as it approaches a major corporate restructuring. The company's shares have seen a notable decline in recent days, coinciding with updates on its demerger plans and the resumption of operations at its Jaguar Land Rover (JLR) subsidiary following a cyberattack.

Share Price Movement and Demerger Details

Tata Motors' stock has witnessed a decline of 6.80% over four consecutive sessions, settling at Rs 689.30. This drop has pushed the share price below the Rs 700 mark, a development that has caught investors' attention. The decline comes as the market anticipates the company's upcoming demerger, with the record date set for October 14, 2025.

The demerger will split Tata Motors into two separate entities:

1. TML Commercial Vehicles
2. Tata Motors Passenger Vehicles (including Jaguar Land Rover)

Shareholders will receive shares in both new entities in a 1:1 ratio, meaning for each share of Tata Motors, investors will get one share each in the two new companies.

Trading Restrictions and Debt Transfer

In preparation for the demerger, several trading restrictions have been implemented:

• Trading restrictions on Futures & Options and Margin Trading Facility positions began on October 8, 2025.
• New positions in these instruments are prohibited until the demerger process is completed.

Additionally, Tata Motors is transferring Non-Convertible Debentures worth Rs 2,300 crore to the commercial vehicle arm as part of the restructuring process.

JLR Operations Resume Post-Cyberattack

In a separate but significant development, Jaguar Land Rover, a wholly-owned subsidiary of Tata Motors, has announced the phased restart of its manufacturing operations. This comes after a cyberattack in early September that disrupted production.

Key points regarding JLR's restart:

• Production resumption began on October 8, 2025, at the Electric Propulsion Manufacturing Centre and Battery Assembly Centre in the UK.
• Vehicle manufacturing in Nitra, Slovakia, and the Range Rover and Range Rover Sport production lines in Solihull, UK, are also restarting this week.
• JLR is implementing a new financing scheme to support its suppliers during the restart phase, offering early payments to aid cash flow.

Impact on JLR's Q2 FY26 Performance

The cyberattack had a significant impact on JLR's second-quarter performance:

The company noted that the Range Rover, Range Rover Sport, and Defender models accounted for 76.70% of total wholesale volumes in Q2 FY26, slightly down from 77.20% in the previous quarter but up from 67.00% year-on-year.

Looking Ahead

As Tata Motors navigates through these significant changes, investors and market watchers will be keenly observing the impact of the demerger on the company's valuation and performance. The successful resumption of JLR's operations will be crucial for the company's recovery in the coming quarters.

Both new entities resulting from the demerger are expected to be listed on the BSE and NSE, subject to regulatory approvals. This listing will provide investors with focused exposure to either the commercial vehicle segment or the passenger vehicle segment, including the luxury brand JLR.

As these developments unfold, Tata Motors continues to be a focal point in the Indian automotive sector, with its strategic moves likely to have far-reaching implications for the industry and its stakeholders.