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Tata Motors - Simple Case Study

Tata Motors announced that it will demerge its passenger vehicles business into a separate entity. A demerger splits a parent company into two or more independent companies, allowing each business to focus on its strategy and unlock value. The demerger aims to increase focus, allow customized strategies for different businesses and unlock value for shareholders.

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Yash Johari
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45 views21 pages

Tata Motors - Simple Case Study

Tata Motors announced that it will demerge its passenger vehicles business into a separate entity. A demerger splits a parent company into two or more independent companies, allowing each business to focus on its strategy and unlock value. The demerger aims to increase focus, allow customized strategies for different businesses and unlock value for shareholders.

Uploaded by

Yash Johari
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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the valuation scho

TATA MOTORS

4 DEMERGER -
(
-
&

E
-

&

simplest explanation -

Ever
motors announced Demerger
7 -m

Recently
- -

understand
Let's
everything
from scratch-
?
is Demerger
Mat

Listed
--
One
--
company
°
-
Separate its businesses
-

-
Now two
--
companies are

listed ↳
?
is Demerger
Mat

Before
>
- one
company
After
-

-
tho panies
.
Why
- emerger ?
Generic Reasons
↳ focus on main Business
unit
↳ los
separate making

*
Real Reason

↳ AVE
UNLOCKING

↳
demerg ?
How en creates value

value
value of > of
TWO Businesses
one
- -
Business
- -

-
>
Let's understand
Adani Demerger
value unlock
--

↳
↳ In 2015, Adani enterprises
announced a
egaerger
of its Businesses

↳
Beforemerger
10 ,
S hares
000 -
Adani Enterprises

AftDemerger
10,000 x Adani Enterprises
14123 X Adani Port

mone
& e
18596 X Adani Power created
10000 x Adani
Transmission
② ②

massive
②
-
value
unlock !
↳
Adais
_
again
Demergerspre -

have
started
They AEL
as

projecting
- 'Incubator'
Nurture
its
who
other
-
Business
But what about

moFors
-
Samajh
jao
↳
what
--
happened ?

Tata motors to
Demerge

Tata motors

--
↑ Passanger Vehicle

↑motors -
TATA

Tata motors

ommercial Vehicle
management
What ?
say

Increase focus
-

customised
strategy
-

value unlock
--

↳ Let's Deep dive


↳
makes sense to
I separate

PBusinesses
c .

Dynamics are different.

cV
-
market is matured

relatively
↳
CV Registration
>
- declining
b
>
-
It will

Kurt TAMO

Overall
growth
if .
not demerged
4 00

PV contribute 78 % in Revenue

↳ Need a
focussed
entity to tap
Ev
opportunity
.
Market valuation

· TAmo is cheaper than PV peers


Market valuation

·
TAMO is cheaper than CV peers
it will
How afte
shareholders
?

A share -Pu
one share
>
-
in TAMO >
- ↓ Share CV

↳
What's ahead
----
for
TAMO
?

Demerger creates value

Subject to ,

Execution
-

-
Economic condition
have learnt
Iey something
REPOST to
help others
-

SAVE -
Future Reference
-

i
>
- -
- -

&

/ 2
follow Karlo
-
Premium content
hain

↳ EK Like thi no
jaye

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