In 2025, Tata Motors trailed Nifty with a 10% drop, but recent weeks reveal a steady rebound in momentum.
Why Tata Motors Shares Rallied 4% Today?
Tata Motors stock surged up to 4% on May 7, touching ₹675 per share. This jump made it the top gainer on the Nifty 50 index for the day. The surge came after two major catalysts: shareholders approving the long-awaited demerger of its Commercial Vehicle (CV) business, and the India-UK Free Trade Agreement (FTA) reducing auto import tariffs significantly.
The Tata Motors stock surge has revived investor interest after a lacklustre 2025 so far, where the stock declined about 10%, even as the Nifty index rose by 2%. However, momentum has returned, with Tata Motors climbing nearly 15% over the past month.
CV Business Demerger: A Game-Changer for Investors
The company revealed that an overwhelming 99.99% of shareholders voted in favour of spinning off its CV business into a separate listed entity. Tata Motors had first shared plans of this restructuring back in March 2024.
As per the plan, every existing shareholder will receive one share in the new CV company for every Tata Motors share they hold. This strategic move is expected to unlock value for investors, enabling sharper business focus and better financial transparency.
Analysts believe this demerger could help Tata Motors streamline operations and boost performance across both its CV and passenger vehicle segments. In a market where segmentation and specialisation are becoming key, this could be a big step forward.
India-UK Free Trade Deal: JLR to Ride the Wave
Another major boost came from the India-UK Free Trade Agreement, which slashed automobile import tariffs from over 100% to just 10%, under a quota system. Though details of the quota remain unclear, this change is a huge win for premium carmakers.
Tata Motors’ UK-based subsidiary, Jaguar Land Rover (JLR), stands to benefit the most. With lower import costs, JLR could potentially ramp up sales in India, tapping into the rising appetite for luxury vehicles.
This tariff relief not only strengthens Tata Motors’ global play but also gives Indian customers better access to premium cars at competitive prices.
What’s Next for Tata Motors Stock?
The market is now optimistic about Tata Motors, given its smart restructuring and favourable trade winds. While the stock has underperformed so far in 2025, recent developments suggest a possible turnaround story in the making.
With fresh buzz around the CV demerger and JLR’s potential sales lift in India, long-term investors may find this an attractive re-entry point. However, as with all stock decisions, staying updated on further developments and quota clarity in the FTA is essential.
Disclaimer: The views and investment insights provided here are based on publicly available information and do not constitute financial advice. Readers are advised to conduct their own research or consult certified financial experts before making investment decisions
