Tata Motors has recently completed its long-awaited demerger, splitting its operations into two independent listed entities - the Passenger Vehicles (PV + JLR) business that remains under Tata Motors and the newly listed TML Commercial Vehicles Ltd (TMLCV) representing its Commercial Vehicles segment.

If you held Tata Motors shares before the demerger, you now see two separate stocks in your Groww portfolio: Tata Motors (PV + JLR) and TML Commercial Vehicles Ltd.

What happens in a demerger

A demerger is a restructuring process where a company separates one or more of its businesses into a new entity. Shareholders of the original company receive shares in the new entity in proportion to their existing holdings.

In this case, for every 1 share of Tata Motors you held, you’ve received 1 share of TMLCV.

Importantly, your total investment value doesn’t change because the overall value of the company remains the same - only now it’s represented by two separate companies.

Why your portfolio values may look different

After the demerger, exchanges adjust the prices of both companies to reflect the split in value. So, while the price of Tata Motors may appear lower, the combined market value of Tata Motors and TMLCV equals what you held earlier. This is a technical adjustment, not a loss of value.

About the Cost of Acquisition (COA)

Under tax rules, when a demerger happens, the Cost of Acquisition (COA) of your original shares is split between the two new entities. This split is based on a ratio announced by the company, which depends on the book value of assets transferred.

As of now, Tata Motors hasn’t published the official COA split. Once the company declares it through an exchange filing, your Groww portfolio will automatically update to reflect the new official values.

Why you see indicative values right now

To ensure your portfolio reflects a realistic picture, Groww is showing indicative COA values based on expected asset ratio of approximately 60:40 between the PV (Tata Motors) and CV (TMLCV) businesses.

This means your total investment value remains the same - it’s just distributed across two entities using this temporary ratio.

Once Tata Motors releases the official COA ratio, we’ll update your portfolio automatically.

No action needed from you

There’s nothing you need to do. The indicative split is only an interim measure to give you a better understanding of your holdings. Your overall investment value and ownership remain unchanged.

It’s natural to feel concerned when you see stock prices change suddenly, but remember—this change is purely structural and does not affect the total value of your investments.

In summary

Tata Motors has demerged into two listed companies: Tata Motors (PV + JLR) and TMLCV (Commercial Vehicles).
You now hold shares in both companies.
Your total investment value is the same as before the demerger.
Tata Motors will announce the official COA split soon.
For now, Groww is showing an indicative 60:40 COA ratio based on company guidance.
The values will be updated automatically once the official ratio is released.

You can relax knowing your investments are safe - the price changes are simply a reflection of the company’s restructuring. We’ll keep monitoring Tata Motors’ announcements and update your portfolio as soon as the official COA details are shared.

Disclaimer: This news is solely for educational purposes. The securities/investments quoted here are not recommendatory.

To read the RA disclaimer, please click here

Do you like this edition?