Car maker Tata Motors Limited (TML) announced a split of business on Monday, into two distinct listed companies and all TML shareholders will maintain the same percentage of shares in both listed companies.
Tata Motors divided the companies into commercial vehicles (CV) and related investments in one entity, while passenger vehicles (PV), electric vehicles (EV), Jaguar Land Rover (JLR), and related investments in another entity.
The company said the split will be carried out under a scheme of arrangement approved by the National Corporation Law Tribunal (NCLT). NCLT’s plan of arrangement for the demerger will be brought before the TML Board of Directors for approval, added the company.
Under the leadership of their respective CEOs, these companies have been running on their own since 2021, said the subsidiary of Tata Group and continued, the breakdown of PV and EV enterprises completed earlier in 2022, was a step up to the demerger.
“This demerger will help them better capitalize on the opportunities provided by the market by enhancing their focus and agility,” said Chandrasekaran, Chairman of Tata Sons, parent of Tata Group.
In early February, Tata Steel, subsidiary of Tata Group, completed merging five of its business entities with the regulatory processes, aimed at driving synergies through raw material security, centralized procurement, and optimization of inventories, reduced logistics costs, as well as better facility utilization.
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