The shares of Tata Motors gained over 3% to Rs 1044 on the NSE after Moody’s Investors Service affirmed Tata Motors’ corporate family rating at “Ba3” and maintained a “positive” outlook. This decision follows the automaker’s strategic move to demerge its commercial and passenger vehicle businesses, intending to list them separately on exchanges.

The demerger, subject to shareholders’ and regulatory approvals, is expected to be completed within the next 12-15 months. Moody’s acknowledges that while the demerger will result in Tata Motors’ remaining operations comprising only commercial vehicles (CVs), the company’s robust presence.

Holding about 40% share in India’s growing CV industry, and its demonstrated ability to generate significant free cash flow through industry cycles, will support its credit profile.

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