Tata Motors Demerger: Stock exchange NSE is scheduled to conduct a special pre-opening trade session for Tata Motors this month. The bourse’s special session will last an hour. Tata Motors has demerged its commercial vehicle (CV) business into a separate entity.
With the demerger, which took effect on October 1, the Tata group auto giant’s commercial vehicle (CV) and passenger vehicle (PV) units became two separate entities. These entities are set to be listed separately on the bourses. Currently, only Tata Motors is listed, with investors reacting to developments in both units using the same stock.
Tata Motors demerger record date
Investors holding Tata Motors shares on October 14 will qualify for one equity share of the CV unit for every share held in Tata Motors.
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The CV unit will be listed as TML Commercial Vehicles. The already listed entity will be renamed as Tata Motors Passenger Vehicles.
The stock will be listed on exchanges BSE and NSE at a later date.
Tata Motors special pre-open timings on October 14
NSE will be conducting the pre-opening session from 9 am to 10 am on October 14.
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When will Tata Motors CV shares be listed on Dalal Street?
The Tata Motors management revealed at an analyst meeting that the CV business will likely to start trading on the bourses sometime around mid-November, subject to regulatory approvals.
Here are answers to a few frequently asked questions (FAQs) on the subject:
How does a demerger impact shareholders?
In a listed company’s demerger into two or more listed entities, shareholders of the parent company typically receive shares of the demerged entity in a pre-decided ratio.
Does the demerged entity get listed automatically?
No. The demerged entity must fulfil several regulatory and exchange-related requirements before it enters the secondary market.
How is the shareholding ratio decided?
This ratio is determined based on the parent company and the demerged business’s valuations.
How are stock prices impacted post-demerger?
The share price of the parent company may adjust to reflect the value of the demerged business that has moved out.
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