Tata Motors Announces Merger of Tata Motor Finance with Tata Capital

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Synopsis:

Tata Motors announces merger of Tata Motor Finance with Tata Capital where Tata Motors will hold a 4.7% stake. The transaction is expected to be completed in 9-12 months. Tata Capital's AUM is ₹1.6 lakh crore, while Tata Motors Finance at ₹32,500 crore.

Tata Motors News Today

Tata Motors revealed plans for merging Tata Motor Finance with Tata Capital, aligned with its strategy to divest non-core businesses and prioritise investments in emerging technologies.

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Merger Details

The merger entails Tata Capital issuing equity shares to Tata Motor Finance shareholders, resulting in Tata Motors holding a 4.7% stake indirectly through its subsidiary TMF Holdings Limited.

Financial Insights

In FY24, Tata Capital reported a net profit of ₹3,150 crore, significantly higher than Tata Motors Finance's ₹52 crore. Tata Capital boasts an asset under management (AUM) of ₹1.6 lakh crore, while Tata Motors Finance manages ₹32,500 crore.

Regulatory Approval Process

The merger process is subject to regulatory green lights from SEBI, RBI, the National Company Law Tribunal (NCLT), and consent from shareholders and creditors. The entire procedure is estimated to take approximately 9-12 months.

Impact on Tata Capital's Portfolio

Tata Capital, primarily operating in retail, SME, and corporate segments, aims to expand its presence in commercial vehicles (CV) and passenger vehicles (PV) financing post-merger. The move is expected to provide growth opportunities for employees and enhance customer offerings through innovative products and digital solutions.

Transaction Advisors

E&Y, ICICI Securities, and Wadia Ghandy & Co advise Tata Capital, while PwC, Axis Capital, and AZB & Partners represent Tata Motors Finance in the transaction.

Assurance to Stakeholders

Tata Motors reassures customers and creditors of Tata Motors Finance that the merger will not negatively impact them, emphasising a seamless transition and continuity in service provision.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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