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Commercial Vehicle Spin-Off Boosts Tata Motors Shares, Offers Clear Value to Shareholders

Prime Highlights:

  • Tata Motors’ commercial vehicle (CV) division debuted on the stock market with a 26% premium, signaling strong investor interest.
  • The demerger separates the CV business from the passenger car and EV segment, allowing investors to value each business independently.

Key Facts:

  • TML CV reported FY25 revenue of ₹75,055 crore and EBITDA of ₹8,856 crore, with a profit margin of 11.8%.
  • Shareholders receive one TML CV share for every Tata Motors share held, so their ownership is not diluted.

Background:

Shares of Tata Motors’ newly listed commercial vehicles (CV) division opened on the BSE on Wednesday at ₹330.25, reflecting a 26% premium over its implied value of ₹261.90 per share. At the time of reporting, the stock was trading at ₹224.90, down 1.28% from its listing price, under the symbol TMCVL.

The listing comes after Tata Motors’ commercial vehicle (CV) division was separated from its passenger car and electric vehicle business on October 1, 2025. After the split, the CV business now runs as Tata Motors Ltd (TML), while the passenger car and EV business, including Jaguar Land Rover (JLR), is now Tata Motors Passenger Vehicles Ltd.

Analysts see the listing as a step to increase value for shareholders. Jahol Prajapati, a research analyst at SAMCO Securities, said the split divides the rapidly expanding passenger car and EV segment from the steady, profitable commercial vehicle business. Investors can now evaluate each segment on its own merit. Shareholders receive one TML CV share for every Tata Motors share, so their ownership stays the same.

The commercial vehicle industry is important for transport, construction, and mining in India. With more shipments, lower material costs, and the GST cut from 28% to 18%, demand for these vehicles is expected to grow. Growth is expected from fleet replacements and new orders from construction and logistics companies.

TML CV reported ₹75,055 crore in sales and ₹8,856 crore in earnings before interest, taxes, depreciation, and amortization (EBITDA) for FY25, with a profit margin of 11.8%. Based on a similar company’s valuation, analysts estimate the division’s market value at around ₹1.14 lakh crore, or roughly ₹310–₹320 per share.

Prajapati added that the listing lets investors focus on the commercial vehicle sector without the usual discount for large conglomerates. He noted it is a stable, profitable investment backed by supportive policies and a growing economy.

At the time of filing, the Sensex was up 688 points (0.82%) at 84,560 points, indicating a positive overall market trend.