Tata Motors: In October, Tata Motors created two separate companies by dividing its commercial and passenger vehicle businesses. Since then, there has been a huge decline in the market cap of Tata Motors. The situation is such that Tata Motors, which was once among the top companies of Sensex, is now on the verge of being out of the 30-share benchmark next month.

InterGlobe Aviation, the parent company of the country’s largest airline company IndiGo, can take its place. According to Mcap, it has emerged as the highest ranked non-constituent company. After the demerger in October, the business of Tata Motors commercial vehicles is worth Rs 1.19 trillion, while the mcap of Tata Motors Passenger Vehicles is Rs 1.37 trillion. In comparison, the market cap of Indigo is more than both of them at Rs 2.27 trillion.

Sensex’s old partner Tata Motors

The December review of Sensex is expected by the end of this month, due to which the changes made in the index will become effective after the close of business on December 19. Tata Motors is an old Sensex stock, which has been associated with it since 1986. However, in between the years 2019 and 2022, it has been removed from the Sensex, but was included again.

Sensex was launched on January 1, 1986. Out of the initial 30 stocks of that era, today only 3 stocks are part of it – Reliance Industries, Hindustan Unilever and ITC. Companies like Tata Motors, Tata Steel, M&M and L&T have exited from time to time, which were later rejoined.

What will happen if Tata Motors withdraws from the index?

If Tata Motors is removed from the index, it may come under pressure in the short term as the stock may face outflows of around Rs 2,232 crore. Whereas Indigo may see inflow of around Rs 3,157 crore. If Sensex chooses to increase commodity exposure during this period, then Grasim Industries can join Sensex. Due to this, there is a possibility of passive inflow of Rs 2,526 crore in Grasim. However, Indigo still remains a strong contender.

How does Sensex work?

In Sensex, companies are generally selected from 13 different sectors according to their market cap. The performance of these companies is reviewed twice a year – in June and December. Companies whose shares fall due to weak performance are removed from the Sensex.

This is done so that the top-30 companies included in it are among the well-established companies that boost the country’s economy. The rise in Sensex shows that 30 big companies of the country are moving forward and developing. Due to this, the production capacity of the country is expected to increase and there is a possibility of increase in employment.

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Tata Motors Demerger: Due to the demerger of Tata Motors, the company’s shares fell by about 40 percent on the trading day of Tuesday, October 14. However, there is no need for investors to panic due to this decline. Tata Motors has divided its passenger vehicles and commercial vehicles into separate companies.

Tata Motors’ commercial vehicles will now be known as Tata Motors Passenger Vehicles Limited. Shares in the company have been distributed in the ratio of 1:1. The decline seen in the shares will be adjusted according to the price of the shares.

Why was the company demerged?

The decision regarding the demerger of the company was taken by the board of Tata Mortus in August last year. The board believed that having separate businesses would allow more focus on both the companies. Besides, there will be better utilization of existing investments and it will be easier to plan for the future.

Also, the company wants to focus more on new growth opportunities in the future. Both the segments are different from each other. Therefore, demerger of the company was announced by the board. From now on, the passenger vehicle unit of Tata Motors will be known as Tata Motors Passenger Vehicles and the commercial vehicle unit will be known as Tata Motors Passenger Vehicles Limited.

Company share status

The date of demerger was fixed by the company on 14 October. Today, shares of Tata Motors Passenger Vehicles Limited opened at Rs 399 on BSE. The shares of the company were listed in NSE at Rs 400. After listing, a decline of 2 percent was recorded in the company’s shares and it was trading at Rs 391. At market close on Tuesday, the share price of Tata Motors Passenger Vehicles Limited fell by Rs 3.90 or 0.98 percent on BSE and closed at Rs 395.10.

Disclaimer: (The information provided here is being given for information only. It is important to mention here that investment in the market is subject to market risks. Always take expert advice before investing money as an investor. ABPLive.com never advises anyone to invest money here.)

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Tata motors Demerger Record Date: Tata Motors has been divided. From 1 October, both the segmens of Tata Motors have separated the segmenial vehicle (CV) and the passenger vehicle (PV). That is, now two companies will be different. With the same disorder, the business of Commercial Vehicle (CV) Tata Motors Limited will run under Commercial Vehicle Limited (TMLCV), while PV Business Tata Motors will have Tata Motors including Electric Vehicle (EV) and Jaguar Land Rover (JLR).

Learn when is the record date of the disorganization?

Tata Motors told the Exchange that Tata Motors Limited (TML), TML Commercial Vehicle Limited (TMLCV) and Tata Motors Passenger Vehicles Limited (TMPV) have fixed the NCLT on Tuesday, 14 October, 2025 after approval of NCLT’s approval of NCLT last week. That is, investors keeping shares of the company by this date will get shares in the new company. Under this, shareholders will get 1 more shares instead of 1 shares, whose face value will be Rs 2 per share. These shares will be listed in BSE and NSE according to the rules.

What does Jefferies expect?

Brokerage Jeffers said on Tuesday that he remains positive about the demand for the passenger vehicle segment in India, but he is seeing challenges in JLR. It is less confident about the improvement in margins in the passenger vehicle segment and the purchase of EVECO Group. Jefferies has retained its ‘Underperform’ rating for Tata Motors and has a target price of 575. After the implementation of the dearger, Tata Motors shares were trading at Rs 717.40 with a gain of 5.43 percent till 2.40 pm on Wednesday afternoon.

Why is the need for disorganization?

Tata Motors approved its commercial and passenger vehicle division disorder in August last year to make the focus focus on it and open different ways of growth. Under this, commercial vehicle business will be covered in a separate unit, while passenger vehicle business- including electric vehicle, Jaguar Land Rover (JLR) and related investment- will be a separate unit. After the demeter, the passenger vehicle division will be known as Tata Motors Passenger Vehicles (TMPVL) and the listing of commercial vehicle segment will be in the name of Tata Motors Limited (TML). Their listing is likely to be held in November.

Disclaimer: (The information provided here is being given only for information. It is necessary to tell here that the investment in the market is subject to risks. Always consult expert before investing as an investor. Abplive.com is never advised to invest money here.)

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