You've probably seen the headlines or noticed a weird "drop" in your portfolio if you hold Tata Motors. Honestly, there is a massive amount of confusion floating around on Reddit and Telegram groups about this. Some people are calling it a stock split. Others are screaming about a 40% crash.
Basically, it's neither.
What actually happened—and what's still unfolding in early 2026—is a massive Tata Motors stock split of a different kind: a formal demerger. The company didn't just slice its shares into smaller pieces like a typical 1:10 split. It literally ripped the company in two.
If you're wondering why your Tata Motors shares suddenly looked cheaper around October 2025, or why you have a new ticker in your demat account, let’s get into the weeds of what really happened with this restructuring.
The 1:1 "Split" That Wasn't a Split
First off, let’s clear the air. In a normal stock split, the company's value stays the same, but the number of shares increases. If you had one share worth ₹1,000, you might now have ten shares worth ₹100.
With Tata Motors, they used a 1:1 entitlement ratio, but for a demerger. This is what trips people up. On the record date—which was October 14, 2025—the company split into:
- Tata Motors Passenger Vehicles Ltd (TMPV): This is the one you probably know. It houses the cars you see on the road, the EVs, and the big money-maker, Jaguar Land Rover (JLR).
- Tata Motors Ltd (TML): Confusingly, the "Commercial Vehicles" (CV) business eventually took over the original name after some legal shuffling. This part handles the trucks, buses, and small commercial haulers.
If you owned 100 shares of Tata Motors before the split, you didn't end up with 200 shares of the same thing. You kept your 100 shares in the "Passenger" business and were given 100 new shares in the "Commercial" business. It’s like owning a house and the developer suddenly gives you the deed to the backyard as a separate property.
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Why the Share Price "Crashed" (Spoiler: It Didn't)
On October 14, 2025, the market woke up and saw Tata Motors trading at roughly ₹400. The day before, it was closer to ₹660.
To a casual observer, that looks like a disaster.
But it was just math. Since the CV business was being removed from the main ticker, the stock price had to be "adjusted" to reflect only the value of the Passenger/JLR side. The market essentially decided that out of that ₹660, about ₹260 belonged to the truck business and ₹400 belonged to the cars.
Prashanth Tapse from Mehta Equities pointed out at the time that this price discovery is actually great for investors. Why? Because for years, the "boring" truck business and the "glamorous" JLR business were tangled together. By separating them, investors can now choose if they want to bet on India's infrastructure (trucks) or global luxury and EVs (JLR).
The Final Cost Split: 68.85% vs 31.15%
This is where the tax talk gets kinda boring but super important. You can't just pick a price for your new shares. The company had to officially tell the Income Tax Department how to split the original "buying price" you paid.
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In November 2025, Tata Motors finalized the Cost of Acquisition (CoA) ratio.
- 68.85% of your original cost goes to the Passenger Vehicle entity (TMPV).
- 31.15% of your original cost goes to the Commercial Vehicle entity (TMLCV).
Say you bought Tata Motors way back at ₹500. For tax purposes, your "buy price" for the car business is now ₹344.25, and your "buy price" for the truck business is ₹155.75. If you sell either one today in 2026, those are the numbers you use to calculate your capital gains.
What Most People Get Wrong About JLR
There’s a common misconception that JLR is "too big" for the domestic passenger business to handle. In reality, JLR is the engine. As of the latest filings, JLR contributes a staggering 87% of the revenue for the Passenger Vehicle entity.
When you hold the post-split Tata Motors (TMPV), you are essentially holding a global luxury powerhouse that happens to have a very successful Indian EV wing attached to it. On the flip side, the Commercial Vehicle side is now a pure play on India's GDP. When roads are being built and e-commerce is booming, the truck side wins.
What You Should Do Now: 2026 Action Plan
If you’re looking at your portfolio today, here is the ground reality. The new Commercial Vehicle entity (TMLCV) officially listed on the exchanges around November 12, 2025.
- Check your Demat: If you held shares before October 13, 2025, and you don't see the new shares, contact your broker immediately. They should have been credited within 30–45 days of the record date.
- Update your "Buy Average": Most apps like Zerodha, Groww, or Upstox updated this automatically, but some older platforms might still show a massive "unrealized loss." Don't panic. Manually apply the 68.85/31.15 ratio to see your true profit/loss.
- Evaluate the "Truck" Business: Now that it's standalone, it's trading like a cyclical industrial stock. Analysts like those at ICICI Securities have valued this segment around 11 times EV/EBITDA. If you think the Indian economy is cooling, this is the one you watch closely.
- Watch the JLR Debt: The Passenger entity is still heavily influenced by JLR’s debt reduction journey. With the demerger complete, the financials are much "cleaner" to read. Look for the Q3 FY26 results (expected soon in early 2026) to see how the car business is performing without the truck margins acting as a cushion.
The era of "one" Tata Motors is over. You're a dual-business owner now. It’s a bit more paperwork during tax season, but it’s arguably the most transparent this company has been in decades.
Actionable Next Steps:
Log into your brokerage back-office and download your "Capital Gains" report for the current financial year. Check if the "Cost of Acquisition" for Tata Motors has been adjusted to the 68.85% ratio. If it hasn't, you'll need to manually adjust your tax filings to avoid overpaying on gains when you eventually sell.