Mumbai: Tata Sons Chairman N Chandrasekaran on Wednesday termed the listing of Tata Motors Commercial Vehicles a “defining moment” in the company’s journey as well as for the automotive industry.
The listing of Tata Motors Commercial Vehicles business comes after the Tata Motors demerger was completed and the company was split into two independent listed entities.
At the listing ceremony of Tata Motors Commercial Vehicles at BSE, Chandrasekaran said, “It is truly a momentous occasion, a very important milestone… a defining moment… for the combined Tata Motors’ journey, if I may say so, also for the automotive industry.” The stock of Tata Motors’ commercial vehicles arm opened at Rs 335, up 28.48 per cent from its discovered price on the NSE.
On the BSE, it listed at Rs 330.25, up 26.09 per cent.
The company’s market valuation stood at Rs 1,22,345.46 crore on the NSE.
Tata Motors’ demerger took effect from October 1.
Terming Tata Motors an “iconic” company, he said it is very difficult to make structural changes to such a company.
“First, the people in the company very passionately believe this is one good, solid company, and we should not touch it. Second, there is also a group view, a perspective that it is one iconic company. So, it is always very difficult to make changes to a company which has been there for a very long time and is considered to be an icon,” he said.
He said the idea of Tata Motors’ demerger took shape in 2017-18. But the plan hit a roadblock due to the COVID-19 pandemic. The demerger plan was subsequently revived.
Chandrasekaran said cash flows coming from the commercial vehicles segment were subsumed in the capital expenditure of Tata Motors’ passenger vehicles vertical.
“… We had to make sure that both the companies were fit, and we said that directionally both companies had to be very strong,” Chandrasekaran said, adding that he was sure that this company had to have a different path.
He said that Tata Motors Commercial Vehicles has continuously innovated and has been the backbone of the Indian economy.
The company has “a fantastic business in heavy commercial vehicles and light commercial vehicles… And now we are working on electrification, hydrogen trucks, new energy buses, and many more new technologies,” Chandrasekaran said.
He said the two demerged companies have different target markets, he said, adding, “We’ve made the company debt-free, which has enabled them to be very bold.” On the Iveco deal, he said, “Hopefully, we should close the transaction in the next few months.” Tata Motors in July had said it will acquire Italian commercial vehicle maker Iveco Group, excluding its defence business, for euro 3.8 billion (nearly Rs 38,240 crore).
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