Tata Motors has completed its demerger, splitting into Tata Motors Passenger Vehicles Limited (TMPV) and Tata Motors Limited (TML). Shareholders are advised on the apportionment of the cost of acquisition for equity shares in both entities. 68.85% of the original share cost should be allocated to TMPV, and 31.15% to TML. This guidance helps shareholders calculate their cost basis for tax purposes following the corporate restructuring.
Demerger Completion and Share Allocation
Tata Motors has finalized its demerger, creating two separate entities: Tata Motors Passenger Vehicles Limited (TMPV) and Tata Motors Limited (formerly TML Commercial Vehicles Limited). The demerger, effective October 1, 2025, was sanctioned by the Hon’ble National Company Law Tribunal, Mumbai Bench.
Guidance for Shareholders
Shareholders who held Tata Motors (TML) shares before the demerger need to apportion their original cost of acquisition between the two new entities for tax purposes. According to the company’s guidance:
Cost Apportionment Ratios
The following ratios should be used to allocate the original cost of Tata Motors (TML) shares:
- Tata Motors Passenger Vehicles Limited (formerly Tata Motors Limited): 68.85%
- Tata Motors Limited (formerly TML Commercial Vehicles Limited): 31.15%
For example, if a shareholder purchased 1,000 shares of TML at INR 400 per share (total cost of INR 4,00,000), the cost allocation would be:
- TMPV: INR 2,75,400 (68.85% of INR 4,00,000)
- TML: INR 1,24,600 (31.15% of INR 4,00,000)
The date of acquisition for the new Tata Motors Limited (formerly TML Commercial Vehicles Limited) shares will be the same as the original Tata Motors (TML) shares.
Important Considerations
This guidance is for informational purposes only. Shareholders are advised to consult their own tax advisors for personalized advice.
Source: BSE
