Everything you need to know about demerger of Tata Motors Limited 2025

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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.

  • Your purchase cost will be split between Tata Motors and TMLCV in the ratio declared by the company.

  • Your holding period for the new shares will be counted from when you originally bought Tata Motors shares, not from the demerger date.

  • Tax will apply only when you sell the shares:

    • Long-term (>12 months): taxed at 12.5% on gains above â‚ą1.25 lakh.

    • Short-term (<12 months): taxed at 20%.

  • Any future dividends from Tata Motors or TMLCV will be taxed at your income slab, with 10% TDS if annual dividends exceed â‚ą10,000.

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.

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Impact on MTF position and pledge shares of tata motors

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Hi @kul.mathur, MTF positions in Tata Motors will be squared off by October 13, 2025, ahead of the demerger record date.

If you wish to continue holding the shares, you can convert your MTF position to delivery from Console on or before October 10, 2025, by 4 PM.

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Can i buy Tata Motors on 13th Oct (as delivery / Cash N Carry) to get this corporate action benefit?

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so heres the question, when the new price gets adjusted after the demerger, if it the LTP is lesser than the average price, if choose to sell the stocks, will the system and market treat it as loss for the same and can i then be allowed no to pay any tax on the same?

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Apologies for the delayed response.

You will be eligible for the scheme of demerger if you have bought the shares of TATAMOTORS on or before October 13, 2025.

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If you sell after the demerger at a price lower than your adjusted cost, it’s considered a capital loss. However, tagging @Quicko here.

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I just read the email regarding the Composite Scheme of Arrangement relating to the TML’s Demerger and found the following strange.

We wish to inform you that the Composite Scheme of Arrangement amongst Tata Motors Limited (“the Company” or “TML”), TML Commercial Vehicles Limited (“TMLCV”), and Tata Motors Passenger Vehicles Limited (“TMPV”)

If, Tata Motors Passenger Vehicles Limited is TMPV, shouldn’t Tata Motors Commercial Vehicles Limited be TMCV, why add an L in the middle.

They are calling it TML Commercial Vehicles Limited, instead of TM Commercial Vehicles Limited, how can they use the word limited twice in the company name. i.e., TMLCV would read as Tata Motors Limited Comercial Vehicles Limited

Bear with me, i know the above query seems silly/trivial, but when i read it, it felt strange so wanted to share/ask.

TML shall continue to be a listed entity. Pursuant to the Scheme, Tata Motors Limited shall change its name to Tata Motors Passenger Vehicles Limited and shall carry on the passenger vehicles business including its investments in Electric Vehicle business and JLR.

TML Commercial Vehicles Limited shall be renamed as Tata Motors Limited.

The currently listed TML will be renamed as Tata Motors Passenger Vehicles Limited and the demerged entity will be named as TML Commercial Vehicles Limited.

Later, the TML Commercial Vehicles Limited shall be renamed as Tata Motors Limited.

i.e., TML becomes TMPV and TMLCV later becomes TML.

My doubt is, if their intention was to retain the TML name for its Commercial Vehicles business, they could have done that by demerging/hiving off the PV business instead of the CV business. By doing so, the demerged entity would have been called TMPV and the existing TML would have continued as the commercial vehicle entity.

Why do it the other way and change the name of the company twice.

Anyway, the above trivial queries are just thoughts that poped up when I read the mail and couldn’t hold myself back from sharing/asking.

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I think this might have something to do with ownership of JLR in the UK. Demerging PV business would have been more complicated due to international regulations, whereas renaming the company would have been easier. I am not sure about this though, these are just my thoughts.

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Hi,
I am holding the Tata Motors stock from almost 3-4 years, but I still not able to get email from CDSL regarding the Demerged shares nor I am able to see the Tata Motors Commercial Vehicles shares into my Demate account. Can you please guide me what actions should I take on this ?

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Hi @Onkar_Kulkarni , the demerged Tata Motors Commercial Vehicles (TMLCV) shares won’t show on Kite but can be seen on Console under ISIN INE1TAE01010. They’ll reflect on Kite once listed on the exchange.

For the missing CDSL email, please reach out to CDSL support regarding this.

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@Priyesh_Kolte If the average purchase price is lower than the last traded price, it is considered a capital loss. This loss can be set off against other capital gains, depending on whether it is classified as a short-term or long-term loss.

Thanks

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my kite zerodha ashow still -38.64% (TMPV ) shares minus
do i need to do somthing ?

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Hi @Nike_J , could yu please open a ticket at support.zerodha.com and DM me the ticket number? We’ll have this clarified.

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Hi
will the COA be adjusted automatically buy ZERODHA or do I have to manually apply the COA in my holding. Is there anything I have to do manually in the COSOLE?

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Hi @nithin_kumrr,

I am seeing a discrepancy in the way Buy Avg is being updated as per the COA in Secondary Demat Account. Could you please check this ticket# 20251115905978 with the team

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Yeah…I’m facing this too

There seems to be an error in the buy averages and the total investment value shown for the Tata Motors shares (TMCV and TMPV) in the Kite app

Although the cost of acquisition has been split in the right proportion (31.15% : 68.85%), and shown correctly under the view breakdown tab for each trade, for some reason, the total amount invested and the buy averages seem to be wrong.

i.e., The breakdown amounts shown for each trade are correct, but there seems to be a totalling error which is affecting the buy average calculation.

Kindly check why there is a mismatch between the amounts shown under the breakdown (which are correct) and the amounts shown for buy averages and total amount invested (which are wrong).

I hope that this will get rectified

Edit: Got rectified :heavy_check_mark: