Tata Motors Share Price Dropped By 40%, But Why You Should Not Worry

Tata Motors shares nosedived on Tuesday, showing a nearly 40 per cent drop in value as the stock started trading ex-demerger. This follows the separation of Tata Motors' commercial vehicle business from its passenger vehicle arm.

Tata Motors' stock opened at Rs 399, down nearly 40 per cent from Monday's close of Rs 660.90, valuing the company at around Rs 1.45 lakh crore. 

Why Tata Motors Shares Went Down

The company said the drop was a technical adjustment due to the separation of its commercial vehicle business.

Under the demerger plan, investors will get one share of Tata Motors Commercial Vehicles Limited (TMLCV) for each Tata Motors share they held on October 14. The fall in Tata Motors' share price shows the separation of the commercial vehicle business, not a loss in investor value.

"The Company has fixed Tuesday, October 14, 2025, as the 'Record Date' to ascertain eligible shareholders of the Company who shall be issued and allotted 1 (one) share (face value of Rs 2/- each fully paid up) in TMLCV for every 1 (one) share (face value of Rs 2/- each fully paid up) held in TML by them as on the Record Date (as per Share Entitlement Ratio under the Scheme)," Tata Motors said in a statement, as per Upstox.

Tata Motors Passenger Vehicles Limited

Tata Motors will remain listed under a new name, Tata Motors Passenger Vehicles Limited (TMPVL), which will handle the company's passenger vehicle, electric vehicle, and Jaguar Land Rover (JLR) businesses.

The newly formed Tata Motors Commercial Vehicles Limited (TMLCV) will be renamed Tata Motors Limited after completing regulatory approvals.

For now, TMLCV shares won't trade until the exchanges grant listing approval, a process that usually takes 45-60 days.

The company's old derivative contracts expired on Monday, and new F&O contracts for TMPVL began trading on Tuesday. TMLCV will not be available for F&O trading immediately.

No Need To Panic

For investors holding shares as of the record date, the allocation is:

• 100 shares of Tata Motors Passenger Vehicles Limited (renamed from Tata Motors).
• 100 shares of Tata Motors Commercial Vehicles Limited (newly listed entity).

Media reports suggest the listing of TMLCV shares is expected within the next four to six weeks, likely by mid-November.