The Mumbai bench of NCLT, comprising judicial member Lakshmi Gurung and technical member Charanjeet Singh Gulati, gave the direction on December 3.
At the tribunal, the companies, through their counsel Hemant Sethi argued that the proposed amalgamation will provide differentiated growth opportunities to their employees and lead to pooling of their knowledge and expertise in the credit business.
Tata Motors Finance funds purchase of new vehicles manufactured by its parent, Tata Motors Ltd, and its group companies. The Tata Group is consolidating Tata Motors Finance with Tata Capital to create a larger unified financial services entity with a wider geographical reach, stronger capital and asset base. The transaction is in line with Tata Motors’ stated objective of exiting non-core businesses and focusing its capital spending on emerging technologies and products.
“Any scheme of arrangement between two major companies such as these typically takes three to four quarters to get complete,” said Ruchi Khatlawala, a partner at law firm Little & Co. “The merger is subject to the approval of Sebi, RBI, NCLT, shareholders, creditors and even certain sector regulators or government departments as the case may be, which is a time-consuming process.”
The boards of Tata Motors, Tata Capital and Tata Motors Finance had approved the merger plan of the two NBFCs on June 4. The deal has already received approvals from the Reserve Bank of India and the Competition Commission of India.For fiscal 2024, Tata Capital reported a net profit of Rs 3,150 crore, while Tata Motors Finance posted Rs 52 crore.
