Investors were surprised as Tata Motors shares opened at ₹399 on October 14, sharply lower than the last close of ₹660.90. This nearly 40 percent drop triggered confusion across trading platforms and social media. However, the fall is not due to poor performance or market panic. It is a technical adjustment linked to the company’s demerger.

Demerger of Commercial and Passenger Vehicle Businesses Explained

The primary reason Tata Motors share is falling today is the official demerger of its commercial vehicle and passenger vehicle divisions. As of the record date, shareholders will receive one share of the newly formed Tata Motors Commercial Vehicles Limited for every share held. The original Tata Motors stock now reflects only the passenger vehicle business, including electric cars and Jaguar Land Rover.

Why the Price Drop Is Not a Real Loss

The apparent 40 percent decline is not a loss in value but a redistribution of valuation. The commercial vehicle business has been spun off, and its value is no longer included in the Tata Motors Passenger Vehicles stock. This means the drop is notional and does not indicate a decline in the company’s overall worth.

What Investors Should Know About the New Structure

• The car-making business is now with Tata Motors Passenger Vehicles Limited
• Tata Motors Commercial Vehicles Limited will be a standalone entity
• Shareholders will hold both entities post-demerger
• The overall value is still near the pre-demerger market capitalization

Market Reaction and Investor Sentiment

Whereas few investors panicked observing the drastic plunge, experts have explained that this is a normal adjustment. The Bombay Stock Exchange organized an exclusive pre-market session to find out the new price so that there is transparency and stability. Analysts anticipate both organizations to do well as separate entities with targeted strategies and more transparent financial reporting.

Final Thoughts

If you want to know why Tata Motors share is dropping today, the reason is the strategic demerger. It is not alarming but rather a move towards releasing higher value for the shareholders. Investors are recommended to be up to date and not react to notional price changes without knowing the background.