Tata Motors Shares in Focus as NCLT Approves the Merger of TMFL with Tata Capital

Tata Motors Finance Limited (TMFL), a fully owned subsidiary of Tata Motors, has merged with Tata Capital Limited (TCL) under a Scheme of Arrangement. This decision was approved by the National Company Law Tribunal (NCLT) on May 6, 2025, and the merger became effective on May 8, 2025. As a result, TMFL is no longer a subsidiary of Tata Motors.

Reasons and Benefits

The merger helps Tata Motors focus on its main businesses by exiting non-core sectors like financing. TCL will benefit from TMFL’s strong presence in commercial and passenger vehicle financing. The merger will help TCL expand its customer base and offer new products using digital platforms. It will also give growth opportunities to employees. This move supports Tata Motors' strategy to divest non-core assets and focus capital on emerging technologies and core product development.

Financial and Operational Impact

TMFL had a revenue of ₹3,996 crore and a net worth of ₹4,797 crore as of March 31, 2024. This represented 0.91% of Tata Motors’ revenue and 5.65% of its net worth. Post-merger, TMFL shareholders will receive 37 equity shares of TCL (₹10 each) for every 100 TMFL shares (₹100 each). TCL had Assets under management (AUM) of ₹1.6 lakh crore, and TMFL had ₹32,500 crore. Post this Merger, Tata Motors will hold a 4.7% stake in Tata Capital.

Legal and Shareholding Structure

The merger involved an agreement between Tata Motors, TMFL, TMF Holdings and TCL. TMFL was a step-down subsidiary, and TMF Holdings is a wholly owned company of Tata Motors. TCL is a part of the Tata Group and is now a related party. 

The transaction involved advisers E&Y, ICICI Securities, and Wadia Ghandy & Co. (for Tata Capital) and Pwc, Axis Capital, and AZB & Partners (for TMFL).

Read more: Tata Motors Share Price Rises Over 2% Amid Reports of Potential US-UK Trade Deal

Share Price Performance 

As of May 09, 2025, at 10:25 AM, Tata Motors Limited share price is trading at ₹700.30 per share, reflecting a surge of 2.56% from the previous day's closing price. Over the past month, the stock has surged by 20.14%. The stock's 52-week high stands at ₹1,179 per share, while its low is ₹535.75 per share.

Conclusion

This merger reflects Tata Motors’ strategic shift toward its core strengths and future growth. It also supports Tata Capital’s plans to grow in the vehicle finance market. 

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