Tata Motors Shares Sink 9% On Monday As Company Sets May 6 Meeting To Discuss Business Demerger Plan
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Tata Motors will hold a shareholder meeting on May 6 to vote on a plan to separate its commercial and passenger vehicle businesses.
Tata Motors Shares Are In Focus After Company Has Fixed Demerger Vote Date On May 6
Tata Motors Demerger 2025: Tata Motors shares sank 9 per cent in the morning trade after Jaguar Land Rover (JLR), which makes luxury cars, paused exports of its British-made cars to the U.S. following President Donald Trump’s 25% tariff came into effect.
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The scrip was trading at Rs 562.65 apiece with a fall of 8 per cent around 9:25 AM, against the previous day close at Rs 613 apiece.
Tata Motors has announced that it will hold a meeting of its equity shareholders on May 6 to vote on a proposed composite scheme of arrangement. It aims to separate the commercial and passenger vehicle businesses.
“…Meeting of the Equity Shareholders of Tata Motors Limited (“the Company") is scheduled to be held on Tuesday, May 6, 2025 at 3.00 p.m (IST), through Video Conferencing (“VC")/ Other Audio Visual Means (“OAVM") (“Meeting") for the purpose of considering, and if thought fit, approving the Composite Scheme of Arrangement amongst the Company, TML Commercial Vehicles Limited, Tata Motors Passenger Vehicles Limited and their respective shareholders (“the Scheme")," the company said in the filing.
“Equity Shareholders whose names are recorded in the Register of Members maintained by the Company/RTA or in the Register of Beneficial Owners maintained by the Depositories as on the
Cut-Off Date, i.e., Friday, March 28, 2025, shall be entitled to attend and exercise their voting rights on the Resolutions proposed at the Meeting. The voting rights of the Equity Shareholders shall be in the same proportion to the paid-up equity share capital held.
On April 4, international brokerage CLSA downgraded its rating on Tata Motors shares from ‘high-conviction outperform’ to ‘outperform’ due to the impact of tariffs. The target price was reduced to Rs 765 per share from Rs 930 previously.
CLSA Downgrades Tata Motors Rating
This downgrade is due to concerns about the 25 percent U.S. tariffs on all auto imports, which could result in a 14 percent year-on-year decline in JLR volumes by FY26. Tata Motors is expected to be significantly affected by these tariffs, as its subsidiary, Jaguar Land Rover (JLR), has substantial exposure to the American market.
In FY24, JLR sold over 400,000 units globally, with around 23 percent of those sales in the U.S. CLSA projects JLR’s EBIT margin to decrease to 7 percent in FY26/27, down from 9 percent in FY25. While JLR’s EBITDA estimate for FY26 has been cut by 15 percent, free cash flow is expected to remain positive.
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April 07, 2025, 07:13 IST