Tata Motors successfully separates passenger vehicle undertaking biz; Stock jumps 3%

3 Jan 2022 , 11:37 AM

Tata Motors has announced the successful transfer of its entire Passenger Vehicle Undertaking unit to Tata Motors Passenger Vehicles. On Monday, Tata Motors stock made a strong rally.

In its regulatory filing, Tata Motors announced that “as an integral part of the Scheme, a portion of the securities premium account has been written down by adjusting against the accumulated losses of the Company to the extent of Rs11,173.59cr as of January 1, 2022.”

Further, Tata Motors said that “in accordance with the Scheme, the Transferee Company has settled the purchase consideration of Rs9,417cr payable for the purchase of Passenger Vehicle Undertaking under the Scheme by allotment of 941,70,00,000 equity shares of INR 10 each/- in the Transferee Company to the Company, as approved at its Board Meeting.”

“Accordingly, the Scheme is effective today, with ‘Effective Date’ being January 1, 2022. The Appointed Date as per the Scheme is the Effective Date. Therefore, the entire Passenger Vehicle Undertaking of the Company stands transferred under the Scheme to Tata Motors Passenger Vehicles Limited with effect from January 1, 2022,” Tata Motors added.

The Tata Group’s flagship automobile in the year 2020, had announced its plan to turn its PV unit into a separate entity and also seek a strategic partnership to enable the unit to secure its long term viability.

A fair valuation has been announced for the Tata Motors PV unit. TML Business Analytics Services presently known as Tata Motors Passenger Vehicles was set to purchase Tata Motors Passenger Vehicles Undertaking for consideration of Rs9417cr.

At around 11.37 am, Tata Motors was trading at Rs495.75 per piece up by 2.8% on Sensex. The stock was near the day’s high of Rs499.70 per piece.