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In a significant move aimed at enhancing strategic focus and agility, the Board of Directors of Tata Motors Limited (TML) has given the green light to a proposal for the demerger of Tata Motors Ltd into two separate listed companies. This decision, made during a meeting held on Monday, entails housing the Commercial Vehicles (CV) business and its related investments in one entity, while the Passenger Vehicles (PV) businesses, including PV, EV, and Jaguar Land Rover (JLR), along with their related investments, will form another entity. The demerger, which will be implemented through a National Company Law Tribunal (NCLT) scheme of arrangement, ensures that all shareholders of TML will maintain identical shareholding in both listed entities. Over recent years, Tata Motors' CV, PV+EV, and JLR businesses have demonstrated robust performance, operating independently under their respective CEOs since 2021. The demerger aligns with the logical progression of earlier subsidiarisation efforts in 2022, aimed at empowering the PV and EV businesses. It is anticipated to bolster the ability of each business to pursue its distinct strategies for achieving higher growth with greater agility, while reinforcing accountability. Tata Motors Chairman N Chandrasekaran emphasized the rationale behind the demerger, stating, ?Tata Motors has scripted a strong turnaround in the last few years. This demerger will help them better capitalise on the opportunities provided by the market by enhancing their focus and agility. This will lead to a superior experience for our customers, better growth prospects for our employees, and enhanced value for our shareholders.? While limited synergies exist between CV and PV businesses, substantial synergies are anticipated across PV, EV, and JLR, particularly in the domains of electric vehicles (EVs), autonomous vehicles, and vehicle software. The demerger is expected to facilitate the harnessing of these synergies more effectively. The NCLT scheme of arrangement for the demerger will undergo approval by the TML Board of Directors in the coming months and will be subject to necessary shareholder, creditor, and regulatory approvals, a process estimated to take a further 12-15 months to complete. However, the company assures stakeholders that the demerger will have no adverse impact on employees, customers, or business partners. The decision reflects Tata Motors' commitment to strategically position its businesses for sustained growth and innovation, ensuring that each entity can capitalize on emerging opportunities in the automotive sector while delivering enhanced value to stakeholders.