New Delhi, Sep 27 (NationPress) Tata Motors Limited has revealed that its demerger into distinct commercial vehicle and passenger vehicle divisions will officially commence on October 1.

This significant step follows the acquisition of necessary approvals from its board, regulatory bodies, and the National Company Law Tribunal.

In line with the demerger, shareholders will be entitled to one share in the newly formed commercial vehicle entity for every fully paid Tata Motors share they possess as of the record date, according to a company announcement.

The record date is yet to be disclosed and will be made public after the completion of required statutory filings. Once the record date is confirmed, investors will be allocated one share in both the commercial vehicle and passenger vehicle companies for each Tata Motors share they own.

Shares will be automatically credited to the demat accounts of investors, with voting rights distributed proportionately across both companies. Each entity will establish its own dividend policies moving forward.

As part of this restructuring, Tata Motors will transform into two independently listed organizations. The arm dealing with commercial vehicles, now operating under TML Commercial Vehicles Ltd. (TMLCV), is anticipated to be renamed Tata Motors Limited once the demerger is finalized.

Conversely, the current listed company will be renamed Tata Motors Passenger Vehicles Ltd., preserving its passenger vehicle, electric vehicle, and other investments such as Jaguar Land Rover.

Girish Wagh, who oversees Tata Motors' commercial vehicle operations, will lead the new commercial vehicle entity, while Shailesh Chandra, who heads the passenger vehicle and electric vehicle sectors, will direct the passenger vehicle-focused company.

Tata Motors has stated that the demerger is intended to unlock value and boost corporate efficiency, emphasizing the unique market dynamics, opportunities, and capital needs of the commercial vehicle and passenger vehicle divisions.

This demerger was initially proposed by Tata Motors in 2024. For accounting and valuation purposes, the designated date is set for July 1, 2025, while October 1 marks the legal commencement date.