Purbalee Dutta 
The demerger of Tata Motors has ended decades of cross-subsidisation between its commercial and passenger vehicle divisions, creating two independent listed companies, Tata Sons Chairman N. Chandrasekaran said on Wednesday.
Speaking at the listing ceremony of Tata Motors Commercial Vehicles (TMCV) at the Bombay Stock Exchange, Chandrasekaran noted that profits from the commercial vehicle arm had historically supported the capital expenditure needs of the passenger vehicle business. The separation, he added, represents a structural shift allowing both entities to pursue focused strategic objectives. “Cash flows from commercial vehicles were historically subsumed in passenger vehicle investments. The demerger ensures both companies are financially strong and strategically aligned,” he said.
The demerger took effect on October 1, culminating in Wednesday’s listing of the CV arm—a milestone Chandrasekaran described as defining for Tata Motors. The idea first emerged in 2017–18 but was delayed due to the Covid-19 pandemic before being revived.
TMCV, a leader in trucks and buses, is expanding internationally across Africa, the Middle East, and Asia while investing in electric and hydrogen-powered vehicles. CEO Girish Wagh said the planned €3.8 billion acquisition of Italy’s Iveco Group, announced in July 2025, will position TMCV among the global top four in the above six-tonne segment. Chandrasekaran expects the deal to close soon, highlighting Tata Motors’ ambition as two strong, independent entities.
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