CCI okays merger of Tata Motors Finance and Tata Capital. Key details

The Competition Commission of India on Tuesday approved the merger of Tata Motors Finance Limited and Tata Capital Limited. With this, Tata Motors will have a 4.7% ownership stake in the combined entity. Tata Motors Finance is the vehicle financing arm of Tata Motors, primarily offering financing to support sales of Tata vehicles.

In June, the boards of both entities unanimously approved the merger proposal. As outlined in the merger terms, TCL will issue its equity shares to TMFL shareholders. This transaction will ultimately lead to Tata Motors owning a 4.7% stake in the combined entity, further solidifying their position within the industry. 

This strategic move is in alignment with Tata Motors' overarching strategy to divest from non-core operations and reallocate resources towards the development of cutting-edge technologies and innovative products, driving the company towards greater success and sustainability.

The merger proposal concerning Tata Motors Finance and Tata Capital aligns seamlessly with Tata Motors' strategic initiative to divest from non-core operations and bolster focus on its core automotive business. As part of its reorganization, Tata Group's automotive division had previously disclosed plans to bifurcate its operations into separate entities catering to commercial vehicles and passenger vehicles. Following the division, both firms are anticipated to be publicly listed.

In the realm of this consolidation, Tata Motors has articulated that Tata Capital is poised to expand its customer base within the burgeoning commercial and passenger vehicle financing sectors. This expansion is set to be fueled by a commitment to offer cutting-edge financial products and digital solutions, thereby offering distinct avenues of growth for the workforce.