Tata Motors demerger: The carmaker stated that the business for commercial cars will be housed in one entity, and the business for passenger vehicles will be part of another organization.
The plan to divide Tata Motors into two distinct publicly traded companies has been approved by the board of directors. A statement from the corporation stated that two businesses will be created as a result of the demerger: one for passenger vehicles and one for commercial vehicles.
All TML shareholders would maintain the same shareholding in both listed firms following the demerger, which will be carried out through an NCLT scheme of arrangement, the company said in a statement.
“The demerger is a natural next step after the PV and EV businesses were subsidiarized earlier in 2022. It will provide the aforementioned businesses more freedom to pursue their own growth strategies with increased agility and accountability.” Additionally, it stated that although there aren’t many synergies between the passenger vehicle (PV) and commercial vehicle (CV) businesses, there are still a lot of synergies between PV, EV, and JLR, especially in the areas of EVs, autonomous vehicles, and vehicle software, which the demerger will help secure.
Tata Motors is demerging; why?
The company’s three automotive business segments are currently running independently and performing consistently, according to N Chandrasekaran, chairman of the Tata Group. According to him, the demerger will enable the three businesses to take advantage of the prospects with greater agility and focus.
“This will lead to a superior experience for our customers, better growth prospects for our employees, and enhanced value for our shareholders,” he stated.
The demerger procedure could take a full year or more to finish.
According to Tata Motors, there won’t be any negative effects from the demerger on partners in business, customers, or staff.
