Shares of Tata Motors experienced a sharp decline on Tuesday, with certain trading platforms reporting drops of around 40% as the stock started trading ex-demerger. Market analysts clarified that the fall does not indicate weak company performance or a broader market downturn. Instead, it reflects the spin-off of Tata Motors’ commercial vehicle division from its passenger vehicle business.
On Tuesday, the shares opened at Rs 399, marking a 39.62% drop from Monday’s closing price of Rs 660.90. After accounting for the demerger, the company’s market capitalisation was estimated at approximately Rs 1.45 lakh crore.
Experts emphasise that such adjustments are normal during a corporate demerger, as the stock price is recalibrated to reflect the separation of business units and their respective valuations.