Tata Motors Finance Limited going to merge with Tata Capital Limited
Tata Motors Limited, Tata Capital Limited and Tata Motors Finance Ltd’s Board of Directors have approved the merger of TMFL with TCL through an NCLT scheme of arrangement today.
As terms of the merger agreement, Equity shares of TCL will be issued to TMFL shareholders, giving TML a 4.7% ownership in the merged business.
With an AUM of INR 1.6L crore, TCL is one of the largest diversified NBFCs in India (rated AAA by all key rating agencies). They provide consumers with 25+ product offerings comprising Retail, SME, and Corporate segments.
With an AUM of INR 32.5K crore, TMFL mainly offers financing options for their new and existing commercial vehicles, passenger vehicles, retailers and vendors.
TCL and TMFL announced profits after tax of INR 3,150 crore and INR 52 crore respectively in FY 24.
The acquisition also aligns with TML’s said goal of leaving non-core businesses and prioritizing capital expenditures on developing technologies and products.
Currently, TCL doing good and has a strong presence in CV/ PV financing. But with the merger of Tata Motors Finance Limited(TMFL), TCL will benefit from new customers in the fast-growing CV/PV financing areas, which it intends to serve with innovative products and digital offerings, while also creating differentiated opportunities for growth for the workforce.
For Completion, the scheme of arrangement will take around 9-12 months and will require approval from SEBI, RBI, NCLT, as well as all TCL and TMFL’s shareholders and creditors.
This merger will not have a negative impact on TMFL’s consumers or creditors.
