Tata Motors board plans to subsidiarise passenger vehicle business

The board of directors of Tata Motors Limited (TML) has in-principle approved to subsidiarise TML's passenger vehicle (PV) business, including EV by transferring relevant assets, IPs and employees directly relatable to the PV business for it to be fully functional on a standalone basis through a slump sale.

However, certain shared services and central functions will be retained at TML to deliver cost efficiencies for the entire group. The proposed transfer shall be implemented through a scheme of arrangement, which will be tabled for approval to the TML board over the next few weeks. Implementation of the scheme will be subject to regulatory and statutory approvals as applicable, including approval of shareholders and creditors. TML expects the transfer process to be completed in the next one year.

The passenger vehicle business is seeing a rapid transformation in the form of tightening emission norms, a push towards electrification and enhanced disruptions from autonomous & connected technologies. Additionally, India continues to remain an attractive market for global OEMs while, the aspiration levels of Indian consumers continue to rise, requiring stepped up investments in contemporary products in a competitive market.

Over the last few years, TML's PV business has implemented a strong turnaround and earned its right to grow by launching a slew of successful products like Tiago, Tiger, Nexon, Hexa, Harrier and most recently, Altroz and Nexon EV. A fully-refreshed BS VI ready product portfolio based on the impact 2.0 design philosophy, consistently improving NPS scores, improved retail market shares and an exciting entry into EV space, coupled with improved profitability, makes the business ready to realise its potential.