Tata Motors Shares Plummet 40%: Assessing the Stock’s Decline
Tata Motors experienced a significant decline in share prices, plummeting nearly 40% on Tuesday. This sharp drop coincided with the company’s recent demerger, which has led to the separation of its commercial vehicle sector from its passenger vehicle division. The decline is the result of an adjustment in stock values following the corporate restructuring, rather than any immediate loss in business fundamentals.
Tata Motors Shares Plummet 40%: Understanding the Decline
As of October 14, 2025, Tata Motors shares opened at Rs 399, reflecting a nearly 39.62% decrease from the previous day’s closing price of Rs 660.90. This decline is being viewed as a technical adjustment rather than a reflection of the company’s overall performance.
Details of the Demerger
The demerger process allows shareholders one additional share in the newly formed commercial vehicle entity for each share held in Tata Motors as of the record date. This is intended to unlock value and sharpen focus on both the passenger and commercial segments.
- Record Date: October 13, 2025, was the last day to buy shares of Tata Motors to receive shares in the new entity.
- New Entity’s Name: The commercial vehicle division is now called Tata Motors Commercial Vehicles (TMLCV).
- Share Ratio: Eligible investors will receive shares in TMLCV on a 1:1 basis.
- Market Capitalization: Following the fall, Tata Motors’ market capitalization stood at approximately Rs 1.45 lakh crore.
Trading Implications
The share adjustment has given rise to the new entity, Tata Motors Passenger Vehicles Limited (TMPVL), which began trading on the same day. However, TMLCV will not be immediately traded on futures and options.
Brokerage firm SBI Securities had anticipated that post-demerger, Tata Motors stocks would trade between Rs 285 and Rs 384. This estimation underscores the importance of the passenger vehicle division’s performance, particularly Jaguar Land Rover (JLR), and its correlation with global automotive trends.
Experts suggest that while the share price drop may cause concern, it results from an accounting adjustment tied to the demerger process, rather than an inherent weakness in Tata Motors’ business fundamentals. Investors are advised to approach their trading decisions cautiously and consider consulting a financial expert.
