Tata Motors announces a major split, unveiling two distinct entities.

In the wake of surpassing Hyundai to claim the title of India’s second-largest car maker, Tata Motors swiftly revealed a significant move. On Monday, the board of Tata Motors greenlit the demerger, a strategic decision aimed at fostering synergies and propelling the company toward expanded growth. after this News Tata Motors share price jumped around
(34.70) 3.52%. With this, Tata motors Shares closed at a price of ₹ 1021.90.

Opting for a strategic demerger, Tata Motors has decided to partition its operations into commercial and passenger vehicle businesses.

This move follows the earlier subsidiarization of the passenger vehicle and electric vehicle businesses in 2022. Tata Motors sees the demerger as a logical progression, enabling the respective businesses to pursue individual strategies for enhanced growth and agility while reinforcing accountability. The company conveyed this decision in a stock exchange notification.

In terms of recent financial performance, Tata Motors reported a notable upswing in the third quarter of 2023 (Oct-Dec). The profit soared to Rs 7,100 crore, marking a substantial 133% year-on-year increase. Additionally, the revenue witnessed a robust 25% surge, reaching Rs 1.11 lakh crore during the same period.

After the split, the exciting part is how things are getting organized! All the cool stuff like passenger cars, electric vehicles, Jaguar, Land Rover, and related investments are joining forces in one crew. Meanwhile, the heavy-duty commercial vehicles and their investments are teaming up in another league. It’s like giving each team its own playground to rule!

The company plans to execute the demerger using an NCLT scheme of arrangement. Getting the nod from the Tata Motors board, shareholders, creditors, and regulators for this NCLT plan might take a year or two, as per their estimation. Even after the demerger is complete, every Tata Motors shareholder will still hold the exact same number of shares in both newly listed companies.

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