Tata Motors Finance Limited (TMFL) has officially merged with Tata Capital Ltd (TCL), ceasing to be a step-down wholly owned subsidiary of Tata Motors Ltd (TML) as of May 8. The merger, approved by the Mumbai bench of the National Company Law Tribunal on May 6 and ratified by the boards of TML, TMFL, and TCL on June 4, 2024, marks a significant restructuring within the Tata Group’s financial services landscape.
This move supports TML’s strategic focus on core areas such as emerging technologies and next-generation products, while systematically divesting from non-core businesses. As part of the merger terms, TCL will issue equity shares to TMFL shareholders, with TML now holding a 4.7% effective stake in the consolidated entity.
Tata Capital Ltd, one of India’s leading diversified non-banking financial companies (NBFCs) with assets under management (AUM) of ₹1.6 lakh crore, is set to significantly broaden its footprint in the commercial and passenger vehicle financing segments following its merger with Tata Motors Finance Limited (TMFL).
TMFL, which specializes in financing new and used commercial vehicles (CVs), passenger vehicles (PVs), as well as offering solutions for dealers and vendors, brings an additional ₹32,500 crore in AUM to Tata Capital’s portfolio. The merger is structured to ensure no adverse impact on TMFL’s customers or creditors.
The transaction is being advised by E&Y, ICICI Securities, and Wadia Ghandy & Co for Tata Capital, and by PwC, Axis Capital, and AZB & Partners for TMFL.
