The board approved a plan to split Tata Motors into two different listed companies. This caused the company's shares to reach their highest level in 52 weeks and go over the Rs 1,000 mark. Early trade saw the stock rise 8% to Rs 1,065.60, and by 11:30 am, it was up 4.25% to Rs 1,027.40 on the Bombay Stock Exchange.
Details on the deal plan
Tata Motors' business will be split into two separate groups as part of the demerger plan. One will be in charge of business vehicle operations and investments related to them, and the other will be in charge of passenger vehicle operations and investments related to PV, EV, JLR, and other types of vehicles. The demerger will happen through the NCLT plan of arrangement, which will make sure that all shareholders keep their shares in both companies.
Response from the market
The demerger would increase focus and agility, which will support the growth of employees, clients, and shareholders, according to N. Chandrasekaran, Chairman of Tata Motors. Brokerages like the stock since they believe the demerger will add even more value, despite the fact that the price has increased by about 30% year to date.
Looking to the Future
The market's good reaction to the news of the demerger shows that people are confident in Tata Motors' long-term goals. Shareholders should get more value from the move, and the company should become more competitive in both the commercial and passenger car markets.
Image Source: Multiple Agencies
(Inputs from agencies)
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