Tata Motors Finance merger with Tata Capital

Merging TCL will issue its equity shares to the shareholders of TMFL resulting in TML will hold a 4.7% stake.

Mumbai- The Board of Directors of Tata Motors Limited (TML), Tata Capital Limited (TCL) and Tata Motors Finance Ltd (TMFL) have today, a merger between TMFL and TCL was approved through an NCLT scheme of arrangement. As part of the merger, TCL will issue equity shares to TMFL shareholders. Consequently, TML will hold a 4.7% stake in the newly merged entity.

TCL, a top-rated NBFC in India with an AUM of INR 1.6 lakh crore (USD 19,277 Million), offers 25+ products across Retail, SME, and corporate segments. TMFL, with an AUM of INR 32.5K crore (USD 3,915 Million), primarily finances new and used commercial vehicles, passenger vehicles, and provides dealer and vendor financing.

In FY24, TCL and TMFL reported profits of INR 3,150 crore (USD 379 Million) and INR 52 crore (USD 6.2 Million), respectively. The merger aligns with TML’s strategy to exit non-core businesses and focus on emerging technologies. It will expand TCL's presence in the CV/PV financing sectors, gaining new customers and offering innovative digital products, while providing growth opportunities for employees.

The merger, subject to SEBI, RBI, NCLT, and shareholder and creditor approvals, will take approximately 9-12 months to complete. It will not adversely impact TMFL customers or creditors. Advisors for TCL are E&Y, ICICI Securities, and Wadia Ghandy & Co., while PwC, Axis Capital, and AZB & Partners advise TMFL.