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 takes effect from October 1, 2025, and the record date for the demerger is October 14, 2025. If you hold Tata Motors shares as of this record date, you will be eligible to receive shares in the new company.
You can read the detailed order filed with NSE and BSE here.
Here’s the circular for the scheme of arrangement covering the special pre-open session and F&O contract adjustment of Tata Motors Limited (TATAMOTORS).
Special pre-open session (SPOS)
A special pre-open session will be conducted for Tata Motors on Tuesday, October 14, 2025, from 9:00 a.m. to 10:00 a.m. to determine the price of Tata Motors post-demerger.
During this session, orders can only be placed, modified, or cancelled. The order matching happens at the end of the session. Normal trading will resume from 10 AM.
What happens to Tata Motors F&O contracts?
All existing F&O contracts of Tata Motors expiring in October, November, and December will expire on October 13, 2025, and new contracts will be introduced for trading with a revised lot size from October 14, 2025, based on the price discovered in the pre-open session.
Trading in F&O contracts will start from 10 a.m. onwards.
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?
Tata Motors (the post-demerger PV + EV + JLR company) will trade from October 14, 2025, after price discovery in the special pre-open session (SPOS) between 9:00 a.m. and 10:00 a.m.
The shares of Tata Motors Commercial Vehicles Ltd (TMLCV) will be listed separately on NSE and BSE after regulatory and exchange approvals are complete. The exact listing and trading date for TMLCV will be announced by the exchanges through a separate circular.
What will be the average price of the shares?
The cost of your Tata Motors holdings will be apportioned between Tata Motors Ltd (post-demerger) and Tata Motors Commercial Vehicles Ltd (TMLCV) based on a cost allocation ratio to be announced by the company after the record date.
This ratio will be derived from the price discovered in the special pre-open session (SPOS) on October 14, 2025, and will determine how your original cost of acquisition is split between the two entities for capital gains computation.
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 announces the cost allocation ratio and the exchanges publish circulars for TMLCV’s listing and F&O reintroduction.