Tata Motors Demerger: Record Date, Share Swap Ratio And More — Key Details To Know On Final Day
Tata Motors Demerger: For a company long seen as a diversified juggernaut, the coming could mark a more focused chapter for the larger Tata Motors group.
(Photo: Usha Kunji/NDTV Profit)
Shares of Tata Motors Ltd. are in focus on Tuesday, in what will be the final day of trading before the company's landmark demerger into separate businesses for passenger and commercial vehicles.
The stock opened lower in trade and has witnessed a range-bound session. Tata Motors is currently trading with cuts of 0.25% and had earlier reached an intraday low of Rs 666.
Tata Motors Demerger: What We Know So Far
The demerger, which will be effective Oct. 1, will restructure Tata Motors into two separate listed entities. One company will house the commercial vehicle business, while the other will house the passenger vehicle business, including the electric vehicle operations and the Jaguar Land Rover.
Post the analyst meet, brokerages shared mixed views about Tata Motors ahead of the demerger. They expect a potential upside from the possible Iveco acquisition and tailwinds from the Goods and Services Tax reforms, but concerns remain about the short-term demand outlook for Jaguar Land Rover.
Tata Motors Demerger: What You Must Know
So far, Tata Motors has announced in its analyst meet that the record date for the demerger will be fixed for mid-October, subject to approval from the registrars.
What investors must know is the 1:1 share swap ratio, which will essentially hand a regular investor one share of passenger and one share of commercial vehicle entity shares for every one fully paid Tata Motors share.
If you hold 100 shares of Tata Motors on the record date, you will receive 100 shares of the passenger vehicle entity and 100 shares of the commercial vehicle entity, which will be renamed to Tata Motors Limited.
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For investors, the last trading session is often critical. Once the demerger is legally in force, demat accounts will reflect two separate stocks, each trading under its own ticker and priced independently.
With last-minute trades underway, it will be now interesting to see how each of the units begins a life of its own. For a company long seen as a diversified juggernaut, the coming could mark a more focused chapter for the larger Tata Motors group.
