Tata Motors Stock Plunges 40%? Here’s Why It’s Not a Crash, But a Demerger Adjustment
Mumbai: Shares of Tata Motors appeared to have plunged on Tuesday, October 14, opening at ₹400 on the NSE after a special pre-open session. However, this significant drop is not a market crash but a technical price adjustment following the demerger of its commercial vehicle (CV) business. The current stock price now reflects the value of its passenger vehicle (PV) business only.
The company had set October 14 as the record date for the demerger. This means shareholders who owned Tata Motors stock as of this date are eligible to receive one share of the newly formed commercial vehicle entity, TML Commercial Vehicles Ltd (TMLCV), for every one share of Tata Motors they hold.
The demerged commercial vehicle business is expected to be listed separately on the BSE and NSE in November. The demerger officially became effective on October 1, with the stock price adjustment taking place today. On the BSE, the stock opened at ₹399 and later traded around ₹391.35.
About the Demerger
In a strategic move announced in August last year, Tata Motors’ board approved the splitting of its commercial and passenger vehicle businesses into two distinct, publicly listed companies. The goal is to sharpen the focus of each segment and better capitalize on growth opportunities.
Following the split, the passenger vehicle arm will be known as Tata Motors Passenger Vehicles (TMPVL), while the original entity, now representing the commercial vehicle business, will continue to be listed as Tata Motors (TML), with the new listing for the commercial arm expected soon.
Recent Stock Performance
Prior to this adjustment, Tata Motors shares had seen a phenomenal rally of 420 percent over the past five years. However, in the last month, the stock has declined by nearly 7 percent and is down over 11 percent year-to-date in 2025.
