Tata Motors says demerger will allow all businesses to unlock potential
₹80,000 crore business (commercial vehicles) is very large. And it is growing and generating tonnes of cash," said Balaji.“So, you need management bandwidth and the board’s time for this.
With this split, they can double down on CV and respect the opportunity that CV provides and give it the full muscle that it requires," he said.The gross debt of Tata Motors will be split between the two emerging companies in proportion to their assets. Currently, the CV business has about 60% of the assets, Balaji said.The company expects the demerger to take 12 months.During this period, Jaguar Land Rover, the British arm of Tata Motors, is expected to become net debt free, he said.
The company has no plans to demerge JLR into a separate company at the moment, he added.Tata Motors’ standalone India business achieved zero net debt as of FY24.Post the demerger, the CV business will have eight business verticals, three of which have been newly created. These include medium and heavy CV, intermediate and light CV, small CV, buses, international business, downstream spares and services, smart city mobility and digital business.Tata Motors is the country's largest CV maker.“This demerger will allow the CV business to go behind its own aspirations.
There will be freedom in terms of accessing capital and grow in areas which will not have taken priority otherwise," said Girish Wagh, executive director, Tata Motors. Wagh is heading the commercial vehicles business unit.The PV business will focus on increasing its market presence, said Shailesh Chandra, managing director, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility.The company’s present portfolio allows it to participate in 53% of India’s PV market, which saw 4.2 million
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