Tata Motors demerger: Shares dip on the record date for debenture holders. Opportunity to buy?

Tata Motors share price traded lower on Friday, extending losses for the sixth consecutive session, as investors focused on the record date for the company’s ongoing demerger process. Tata Motors shares declined as much as 1.89% to ₹667.20 apiece on the BSE.

In six trading sessions, Tata Motors share price had dipped over 7% amid heavy selling pressure ahead of the demerger record dates.

Tata Motors Demerger Record Dates

As part of the demerger scheme, Tata Motors has fixed October 10, 2025, Friday, as the record date for debenture holders. The scheme provides for the transfer of non-convertible debentures (NCDs) worth ₹2,300 crore to the newly formed Commercial Vehicle (CV) entity, TML Commercial Vehicles Limited (TMLCV).

Thus, Tata Motors demerger record date for the debenture holders is today.

Separately, Tata Motors demerger record date for the shareholders is October 14, 2025, Tuesday. The company will determine eligibility for share allocation under the approved scheme of arrangement as on the record date.

Tata Motors Demerger Details

Tata Motors demerger became effective on October 1, 2025, and the Appointed Date was July 1, 2025, resulting in the separation of the Commercial Vehicle (CV) business and the Passenger Vehicle (PV) business into two independent companies.

Tata Motors Ltd shall continue to be a listed entity. Pursuant to the demerger scheme, Tata Motors Ltd shall change its name to Tata Motors Passenger Vehicles Ltd and shall carry on the passenger vehicles business including its investments in Electric Vehicle business and JLR.

TML Commercial Vehicles Limited shall be renamed as Tata Motors Limited.

Tata Motors demerger share entitlement ratio is 1:1. This means, Tata Motors shareholders will be issued and allotted one equity share of face value of ₹2 each fully paid up in TML Commercial Vehicles Limited, for every one share of face value of ₹2 each fully paid up held in Tata Motors as on the Record Date.

On the Record Date, Tata Motors share price shall be adjusted to take into account the demerger of the commercial vehicles business, through a price discovery mechanism of the stock exchanges.

Upon finalization of the list of eligible shareholders of TML, the shares in TMLCV shall be allotted and thereafter, such shares shall be listed on the Stock Exchanges, viz., BSE and NSE.

During the period from the date of allotment of shares by TMLCV upto the date of listing on BSE & NSE thereof, the shares of TMLCV shall not be available for trading on the Stock Exchanges. The process of obtaining Listing and Trading permission generally takes 45-60 days from the date of filling necessary applications with Stock Exchanges, Tata Motors said in a regulatory filing October 9.

Guidance on ‘Cost of Acquisition’ of equity shares in TML and equity shares in TMLCV will be communicated in due course, it added.

Tata Motors Share Price Outlook

Tata Motors share price has seen a relative underperformance compared to other Auto stocks in the last few months, noted Ruchit Jain, Vice President, Equity Technical Research, Wealth Management, Motilal Oswal Financial Services Ltd.

“The short term trend for Tata Motors shares seems sideways as the prices are consolidating within the range. The immediate support for the stock is placed at ₹655 while resistance is seen in the range of ₹730 - ₹740 zone. A breakout from this range will lead to the next directional move,” Jain said.

Drumil Vithlani, Technical Analyst at Bonanza highlighted that Tata Motors share price is trading below the 20-week EMA ( ₹688.46), which is now acting as resistance.

“Momentum indicators suggest consolidation or slight weakness, but not a full reversal yet. Given the upcoming Tata Motors demerger event, volatility is expected, so it’s prudent to hold Tata Motors shares if already invested and avoid fresh entry until clarity post-event,” said Vithlani.

According to him, if Tata Motors stock price holds above key support ( ₹669), and manages a close above the EMA at ₹688–690, we may see a short-term recovery towards the target of ₹720, and the next target of ₹736–740, which is a strong resistance zone.

“The immediate horizontal support for Tata Motors share is ₹669.40, while ₹660 – ₹650 levels are the accumulation zone seen in June–July. The 20-week EMA and resistance cluster is ₹688 – ₹690,” said Vithlani.

Tata Motors share price has fallen 4% in one month and has rallied over 16% in six months. On a year-to-date (YTD) basis, Tata Motors shares have declined 9%, while the stock has dropped 27% in one year. However, Tata Motors share price has delivered strong multibagger returns of 390% in the past five years.

At 12:15 PM, Tata Motors share price was trading 0.15% lower at ₹679.05 apiece on the BSE.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.