Tata Motors Board Approves Merger with Two Wholly Owned Subsidiaries
Tata Motors Limited board approved a Composite Scheme of Amalgamation on January 29, 2026, to merge wholly owned subsidiaries TMF Holdings Limited and TMF Business Services Limited with the parent company. The merger aims to simplify corporate structure, reduce administrative costs, and improve operational efficiency. No consideration will be paid, and the company's shareholding pattern will remain unchanged. The scheme requires various regulatory approvals including from shareholders, creditors, and the National Company Law Tribunal.
*this image is generated using AI for illustrative purposes only.
Tata Motors Limited has announced board approval for a comprehensive merger plan involving two of its wholly owned subsidiaries, marking a significant step toward corporate structure simplification. The board of directors approved the Composite Scheme of Amalgamation on January 29, 2026, following recommendations from the Audit Committee.
Merger Details and Structure
The approved scheme involves the amalgamation of TMF Holdings Limited and TMF Business Services Limited with Tata Motors Limited under Sections 230 to 232 of the Companies Act, 2013. The merger will consolidate these entities into a single corporate structure, with both subsidiaries being dissolved without winding up proceedings.
| Entity: | Total Income (₹ crore)* | Net Worth (₹ crore)* |
|---|---|---|
| Tata Motors Limited: | 52,740.58 | 7,849 |
| TMF Holdings Limited: | 107.79 | 5,593.49 |
| TMF Business Services Limited: | 53.47 | (36.23) |
*As per audited standalone financial statements for the year ended March 31, 2025
Business Operations of Merging Entities
The three companies operate in distinct but complementary business areas. Tata Motors Limited focuses on manufacturing commercial vehicles, while TMF Holdings Limited operates as an NBFC – Core Investment Company registered with the Reserve Bank of India, engaged in investing, granting loans, guarantees and other forms of finance to subsidiaries and group companies. TMF Business Services Limited specializes in operating leases business.
Strategic Rationale and Benefits
The proposed amalgamation is designed to deliver multiple operational and financial advantages:
- Structure Rationalization: Reducing the number of legal entities to decrease structural complexity and enable more efficient management
- Cost Optimization: Eliminating administrative duplications and reducing associated costs of maintaining separate entities
- Operational Efficiency: Streamlining business operations under a unified corporate structure
Financial and Regulatory Framework
The merger will proceed without any cash consideration or share exchange. The entire paid-up share capital of both subsidiaries will be cancelled, and no new equity shares will be issued by Tata Motors. The company's shareholding pattern will remain unchanged following the scheme's implementation.
Regarding regulatory compliance, the transaction falls under related party arrangements since both entities are wholly owned subsidiaries. However, the merger is exempt from certain regulatory requirements under the MCA Circular dated July 17, 2014, and SEBI Listing Regulations 23(5)(b).
Approval Process and Timeline
The scheme requires comprehensive regulatory clearances including approvals from shareholders, creditors, the National Company Law Tribunal, BSE Limited, National Stock Exchange of India Limited, and other statutory authorities. The implementation will proceed under the Companies Act, 2013, Income-tax Act, 1961, and other applicable laws.
Under SEBI regulations, the requirement for "No Objection Letter" from stock exchanges is not applicable for schemes involving merger of wholly owned subsidiaries with holding companies. However, Tata Motors and TMF Holdings Limited will file the scheme with stock exchanges for regulatory compliance and public dissemination.
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