MUMBAI: 9th May 2025: Tata Motors has completed the merger of its financial subsidiary, Tata Motors Finance Ltd (TMFL), with Tata Capital Ltd (TCL), effective May 8, 2025, following approval from the National Company Law Tribunal (NCLT) in Mumbai.
This initiative allows Tata Motors to divest from non-core operations and focus on advancing technologies, while also strengthening Tata Capital’s position in the vehicle financing sector.
As a result, Tata Motors maintains a 4.7% stake in Tata Capital. A company announcement confirmed that TMFL has ceased to function as a wholly owned subsidiary of Tata Motors Ltd, indicating a significant restructuring of the Tata Group’s financial services division.
This strategic realignment is expected to give Tata Motors a competitive advantage in the rapidly expanding commercial vehicle (CV) and passenger vehicle (PV) financing markets, further diversifying its portfolio.
The decision to reorganise its financial operations reflects Tata Motors’ commitment to capitalising on emerging automotive technologies while ensuring a smooth transition for existing TMFL clients and stakeholders.
The merger is a strategic move to strengthen Tata Capital’s position as a market leader in India’s non-banking financial companies (NBFC) sector. In the context of the merger, TCL will distribute equity shares to TMFL shareholders, giving Tata Motors an effective 4.7% stake in the newly merged entity.
Tata Capital Ltd, recognised as one of India’s largest diversified NBFCs with assets under management totaling Rs 1.6 lakh crore, is poised to significantly expand its customer base in the CV and PV financing domains through this merger.
TMFL, which specialises in providing financing solutions for both new and used CVs, PVs, dealers, and vendors, has an asset under management of Rs 32.5K crore. Importantly, the merger is not expected to adversely affect TMFL’s customers or creditors.
The transaction is being advised by E&Y, ICICI Securities, and Wadia Ghandy & Co for TCL, while PwC, Axis Capital, and AZB & Partners are advising TMFL.
