Tata Motors shares witnessed a sharp drop of nearly 40% on October 14, 2025, opening at ₹399 compared to the previous close of ₹660.90. The steep fall was not due to any operational or financial concerns but was a technical adjustment following the demerger of the company&rsquo;s commercial vehicle (CV) business.
Under the demerger plan, Tata Motors&rsquo; commercial vehicle segment has been separated into a new entity named Tata Motors Commercial Vehicles Limited (TMLCV), while the passenger vehicle segment continues under Tata Motors Passenger Vehicles Limited (TMPVL). Shareholders holding Tata Motors shares as of the record date are entitled to receive one share of TMLCV for every TMPVL share they own.
The 40% decline in TMPVL&rsquo;s stock reflects the adjustment in market value after the demerger rather than any real loss in shareholder wealth. Post-demerger, TMPVL&rsquo;s share price stands around ₹400, while TMLCV&rsquo;s valuation is estimated at ₹260.75 per share. The move enables investors to assess each business independently, providing clearer strategic focus and potentially unlocking value in both segments.
Experts advise investors not to be alarmed by the headline drop, as it is a structural adjustment. The separation of the passenger and commercial vehicle businesses allows for more transparent performance tracking and could create opportunities for long-term value creation in both the passenger and commercial vehicle segments.
Overall, while the stock price adjustment may appear dramatic, it is a technical outcome of the demerger, positioning Tata Motors for sharper focus and potentially stronger growth across its distinct business units.

Tata Motors shares drop after CV business demerger

40% plunge reflects technical adjustment as commercial and passenger units separate

Tata Motors shares drop after CV business demerger

40% plunge reflects technical adjustment as commercial and passenger units separate

October 15, 2025 | 24:28 IST