Tata Motors' commercial vehicles division has officially been listed on Indian stock exchanges following its recent demerger, which came into effect on October 1. The shares were introduced at ₹335 on the National Stock Exchange (NSE), representing a substantial premium of 28.48% over its discovered price of ₹260.75. Similarly, on the Bombay Stock Exchange (BSE), the shares listed at ₹330.25, indicating a 26.09% increase. The trading of over 368 crore equity shares, with a nominal face value of ₹2 each, will occur under the ticker symbol ‘TMCVL’ and will be categorized in the ‘T’ Group of Securities. For the first ten sessions, the stock will fall under the trade-for-trade segment to facilitate orderly price discovery.

This demerger is part of Tata Motors' strategy to streamline operations, creating two distinct entities: Tata Motors Passenger Vehicles Ltd (TMPVL), which includes the Jaguar Land Rover (JLR) and electric vehicle sectors, and Tata Motors Ltd (TMCV), which focuses on commercial vehicle operations. On the listing day, TMPVL reached a peak price of ₹411.35, while TMCVL peaked at ₹346.75, bringing their combined value to approximately ₹758.10 per share—nearly 15% higher than Tata Motors' pre-demerger share closing price of ₹660.75. The combined market capitalization of both entities surpassed ₹2.7 lakh crore on this day.

The listing and the demerger are likely to cause short-term technical adjustments within major indices, specifically the Nifty 50. Previous to the demerger, Tata Motors was a constituent of the Nifty 50 index, but moving forward, both TMPVL and TMCV will be individually listed. As a result, the count of constituents in the Nifty 50 is temporarily increased to 51 until rebalancing is carried out.

In line with the updated NSE demerger guidelines, TMPVL will retain its spot in the Nifty 50, while TMCV will be included at a constant price for a limited period before possible exclusion from the index. The long-term eligibility of TMCV for inclusion in major indices hinges on its performance against established criteria such as market capitalization, free-float, and trading liquidity during subsequent reviews.

For passive index funds and ETFs, the emergence of Tata Motors' new commercial vehicles entity will require adjustments in their portfolios to align with the altered index composition. Funds tracking the impacted indices will need to either hold both new entities if they qualify or divest from the one that does not meet inclusion criteria as dictated by the index methodology. Closing the trading day, Tata Motors shares fell by 0.79% to ₹327.65, while TMPVL shares decreased by 1.28%, finishing at ₹402.30 on the BSE.