Tata Motors Demerger: Here’s How Analysts Are Valuing the Passenger and Commercial Vehicle Businesses
Tata Motors shares trade adjusted after the demerger of its Commercial Vehicles business. Analysts from Nomura, Goldman Sachs, and Nuvama have issued valuations for the newly separated Passenger Vehicles and CV units, with the PV arm led by JLR and Tata Technologies holdings.
Tata Motors’ long-anticipated demerger separates its Passenger and Commercial Vehicle businesses; analysts peg strong valuations for both arms.
The stocks of Tata Motors Ltd. were adjusted for the demerger of its Commercial Vehicles (CV) business and thus started trading today, which is considered a big event for the leading automobile company. The value of the demerged entity was set at ₹400 per share during a special pre-open price discovery session before the price dropped when trading started.
The date today has also been marked as the record date for the demerger, thereby ratifying the division of Tata Motors into separate listed companies of Passenger Vehicles (PV) and Commercial Vehicles business.
🔹 What Each Entity Includes
After the split, the Passenger Vehicles division, now named Tata Motors Passenger Vehicles Ltd. (TMPVL), will include:
- The domestic PV business
- Jaguar Land Rover (JLR)
- Stakes in Tata Sons, Tata Steel, and Tata Technologies
- Other strategic investments
- The Commercial Vehicles unit will consist of:
- The domestic CV business
- Iveco operations (excluded from the current price target)
- A stake in Tata Capital
🔹 Analyst Valuations Post-Demerger
Nomura
Nomura estimates that post-demerger, both entities hold nearly equal value:
Passenger Vehicles: ₹367 per share
Commercial Vehicles: ₹365 per share
The brokerage highlighted a strong recovery in the PV segment, citing festive demand, GST cuts, and rising premiumization led by popular models such as Tata Punch and Nexon.
Goldman Sachs
Goldman Sachs values the consolidated Tata Motors at ₹700 per share, divided as:
₹236 — JLR
₹436 — India business, further split into:
₹130 for Passenger Vehicles
₹306 for Commercial Vehicles
₹26 — Stake in Tata Technologies
The brokerage also confirmed that Tata Technologies’ stake will remain part of the Passenger Vehicles entity.
Nuvama
According to Nuvama Alternative and Quantitative Research, the CV business is expected to list within 30–45 days.
Nuvama values the Passenger Vehicles business at ₹410 per share, broken down as:
₹176 — India PV business
₹188 — JLR
₹16 — JLR China JV
₹33 — Tata Technologies stake
(Includes a 20% holding company discount)
The Commercial Vehicles business is valued at ₹280 per share, derived from:
₹264 — India CV business
₹14 — Tata Capital stake
(Also includes a 20% holding company discount)
🔹 Market Update
Following the valuation announcements, shares of Tata Motors Passenger Vehicles Ltd. were trading 2.1% higher at ₹408.3 on Tuesday morning.
