Tata Motors has signed a Memorandum of Understanding (MoU) with the Government of Tamil Nadu to explore setting up of a vehicle manufacturing facility in the state.
The MoU envisages an investment of around ₹9,000 crore over five years and can potentially create up to 5,000 jobs (direct and indirect).
Following the signing of this MoU, teams from Guidance, Tamil Nadu's nodal agency for investment promotion and facilitation and Tata Motors Group will work together to take this opportunity forward, the automaker says in a stock exchange filing.
On March 4, Tata Motors' board approved the proposal of demerger of the automaker into two separate listed companies – one housing its commercial vehicles business and the other its passenger vehicles businesses including electric vehicles (EV) and British marque Jaguar Land Rover (JLR). All shareholders of Tata Motors will continue to have the identical shareholding in both the listed entities.
"The demerger is a logical progression of the subsidiarisation of PV and EV businesses done earlier in 2022 and shall further empower the respective businesses to pursue their respective strategies to deliver higher growths with greater agility while reinforcing accountability," the automaker said.
Tata Motors has scripted a turnaround in the last few years. “The three automotive business units are now operating independently and delivering consistent performance. This demerger will help them better capitalise on the opportunities provided by the market by enhancing their focus and agility. This will lead to a superior experience for our customers, better growth prospects for our employees and, enhanced value for our shareholders," said Tata Sons chairman N Chandrasekaran.
The demerger will be implemented through an NCLT (National Company Law Tribunal) scheme of arrangement. The NCLT scheme for the demerger will be placed before the board of directors for approval in the coming months and will be subject to all necessary shareholder, creditor and regulatory approvals which could take a further 12-15 months to complete, the automaker said.
