Tata Motors Demerger: Last Day To Buy Before Record Date — Check Details

Investors will have one last chance to trade Tata Motors as a consolidated entity as Monday marks the final trading day for Tata Motors Ltd. shares before the demerger record date.

Once the demerger kicks in, Tata Motors is set to split into two different entities by dividing the commercial vehicle business and the passenger vehicle business - a move aimed at unlocking growth between the two distinct operations.

The record date for the Tata Motors demerger is set for Oct. 14. The date marks a critical phase of any demerger as it determines shareholder eligibility to receive shares in the newly created entity.

In the case of Tata Motors' demerger, the stock will trade ex-demerger and therefore, investors buying after today will not be entitled to new shares under the new scheme of things.

Post the record date, all eyes will be on the allocation ratio and listing timelines. The newly carved out entity's shares are expected to be listed on bourses within weeks, subject to regulatory approvals.

In short, for investors, Monday's close will lock in entitlement. On Oct 14, NSE will conduct a special pre-open session from 9 a.m. to 10 a.m, giving investors the opportunity to adjust their position ahead of the stock split. Prices may adjust to reflect the carved-out value of the passenger vehicle business, which will then be renamed to Tata Motors Commercial Vehicle Ltd, as confirmed by the company.

TML Commercial Vehicle Limited, meanwhile, will be renamed to Tata Motors Limited.

Investors must note that the share-swap ratio for the demerger has been set at 1:1, which means if you hold one fully paid Tata Motors share by the record date, you will automatically receive one share of the new commercial vehicle company.

No extra payment will be required from your end and the transfer will be completely automatic. It will show up in your account once corporate actions are processed.

Shares of Tata Motors have been under pressure during the demerger timeline, notably falling almost 5% in the last month. Over a year-to-date period, the stock has fallen almost 10%.