CCI Approves Merger of Tata Motors Finance with Tata Capital
In a recent move, the Competition Commission of India (CCI) has approved the proposed merger between Tata Motors Finance Limited (TMFL) and Tata Capital Limited (TCL). This merger is set to bring together two major financial entities under the Tata Group umbrella, with Tata Capital emerging as the surviving entity.
Tata Capital Limited (TCL)
Tata Capital Limited is a wholly-owned subsidiary of Tata Sons Private Limited, TSPL. It is an NBFC-ICC (Non-Banking Financial Company – Investment and Credit Company). It is primarily involved in providing a wide range of financial services that include, but are not limited to, lending, leasing, factoring, and distribution of financial products. Its operations are specifically pointed toward the provision of full financial services for businesses as well as persons, adding to the emphasis of the Tata Group on service excellence with a customer centricity.
Tata Motors Finance Limited (TMFL)
Tata Motors Finance Limited, also an NBFC-ICC, undertakes the business of vehicle financing. It provides loans for new vehicles manufactured by Tata Motors Limited and its group companies, besides pre-owned vehicles. TMFL also plays an important role in offering financial solutions such as refinancing existing vehicle loans. It also extends loans and finance to transporters, dealers, and vendors of Tata Motors Limited, apart from extending working capital, invoice discounting, and factoring services.
Particulars of the Proposed Merger
This merger involves the amalgamation of TMFL with TCL, in which TCL is the surviving company. The proposed transaction structure is a Scheme arrangement to be filed before the NCLT. The aims are to consolidate the financial services of the Tata Group for easier and more efficient operation.
It is expected that the merger would provide a more complete portfolio of financial solutions to its customers through combining vehicle financing expertise of TMFL with broader financial services of TCL. The scale of operations is also likely to increase as an outcome of such a merger, thereby driving growth and strengthening the Tata Group’s financial services segment.
Approval by the CCI is, therefore, an extremely important step in the forward movement of the merger. A detailed order of the Commission will soon be issued, elaborating on the insight in view of the transaction and its ramifications.
This merger underlines the approach of the Tata Group to consolidate its financial services businesses for value addition, with a view to creating a far stronger financial services platform. The merged entity will be better positioned to offer diversified financial products and related services, catering to the needs of an expanded customer base.
