Tata Motors has announced that it will split its business into two separate listed companies. One will house the commercial vehicles (CV) business, and the other will include the passenger vehicles (PV) business, along with EVs and Jaguar Land Rover (JLR).
As part of the demerger, shareholders of Tata Motors will receive 1 share of Tata Motors Commercial Vehicles Ltd (TMLCV) for every 1 share of Tata Motors Ltd they hold.
The scheme will take effect from October 1, 2025. The company will announce the record date soon, which will decide who is eligible. If you hold Tata Motors shares on that record date, you will automatically receive shares in the new company.
You can read the detailed order filed with NSE and BSE here.
When will I receive the new shares?
The new Tata Motors Commercial Vehicles Ltd (TMLCV) shares are usually credited within 30 - 45 days from the record date, depending on approvals and processing. Since Tata Motors is part of the Nifty 50, the timeline could be shorter. You’ll get an email from CDSL once the shares are credited to your demat account.
When will they start trading?
The shares of TMLCV will be listed on NSE and BSE after regulatory approvals are complete. The exchanges will announce the exact trading date once the record date is finalized. After that, Tata Motors (PV + EV + JLR) and TMLCV (CV) will trade as two separate companies.
What will be the average price of the shares?
Your original Tata Motors investment will be split between the two companies in a ratio announced by the company after the record date. This ratio is important because it decides how your cost of acquisition is divided, which will matter when you calculate capital gains in the future.
What happens to Tata Motors F&O contracts?
All open Tata Motors futures and options contracts will be adjusted for the demerger:
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Contracts expiring after the record date will be adjusted as per exchange rules.
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Contracts expiring on or before the record date will be settled on the day before the record date, similar to a normal monthly expiry.
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After the demerger, new contracts will be reintroduced with revised strike prices and lot sizes.
The exchanges will issue circulars with the exact adjustment details closer to the record date.
What about taxation?
Receiving the new TMLCV shares will not trigger immediate capital gains tax, as long as the demerger qualifies under Section 47 of the Income Tax Act.
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Your purchase cost will be split between Tata Motors and TMLCV in the ratio declared by the company.
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Your holding period for the new shares will be counted from when you originally bought Tata Motors shares, not from the demerger date.
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Tax will apply only when you sell the shares:
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Long-term (>12 months): taxed at 12.5% on gains above ₹1.25 lakh.
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Short-term (<12 months): taxed at 20%.
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Any future dividends from Tata Motors or TMLCV will be taxed at your income slab, with 10% TDS if annual dividends exceed ₹10,000.
We’ll update this post once Tata Motors confirms the record date and cost allocation ratio and the exchanges publish circulars on F&O adjustments.