Tata Capital Ltd (TCL) has officially sought approval from the Competition Commission of India (CCI) for its proposed merger with Tata Motors Finance Ltd (TMFL). The transaction, detailed in a recent filing, involves integrating TMFL into TCL through a scheme of arrangement that will be submitted to the National Company Law Tribunal (NCLT). Tata Motors Finance, which specialises in vehicle financing, primarily supports the sale of Tata vehicles, making this move a strategic consolidation within Tata Group’s financial services.
The merger proposal, approved by both Tata Capital and Tata Motors boards in June, will see TCL issue equity shares to TMFL shareholders. As a result, Tata Motors will retain a 4.7% stake in the newly merged entity. This strategic move is in line with Tata Motors’ broader plan to divest from non-core businesses and focus more on innovative technologies and products. TMFL’s integration into Tata Capital Financial Services (TCFS) is expected to streamline operations, improve efficiency, and consolidate Tata Group’s financial services under one roof. The merger aims to combine TMFL’s expertise in vehicle financing with TCFS’s diverse financial portfolio, which includes consumer finance, commercial finance, and wealth management. This consolidation is poised to enhance market reach, better serve a broader customer base, and achieve greater operational synergies. Once the CCI grants regulatory approval, the merger will simplify the Tata Group’s financial structure and offer customers
The proposed merger between Tata Motors Finance and Tata Capital represents a significant consolidation of financial services within the Tata Group. By seeking CCI approval, the companies are poised to enhance their competitiveness and operational efficiency in the growing Indian financial market. The integration of TMFL into TCL will streamline Tata Group’s financial services, aligning with the group’s strategic goals and preparing it to meet the evolving demands of the market. The outcome of the CCI’s review will be crucial in determining the future trajectory of this high-profile merger.
