TVS Motor Plans Consumer Finance Demerger, TVS Motor Services Merger

TVS Motor Company has approved a scheme to demerge its consumer finance and related business into a separate entity, Harita ARC Limited, while merging wholly owned subsidiary TVS Motor Services Limited with the listed company. The board approved the composite scheme at its meeting on October 28, 2026.

Under the proposed arrangement, TVS Motor’s consumer finance and related activities, including lending, investments, leasing and associated support services, will be transferred to Harita ARC on a going-concern basis. The resulting company will issue shares to eligible TVS Motor shareholders in proportion to their existing shareholding.

The scheme is subject to approvals from the stock exchanges, the Securities and Exchange Board of India (SEBI), the jurisdictional National Company Law Tribunal, and the shareholders and creditors of the companies involved, as applicable.

Consumer Finance Business to Become a Separate Entity

The consumer finance business recorded turnover of Rs 3,921 crore for the six months ended September 30, 2026, compared with TVS Motor’s total turnover of Rs 35,770 crore for the same period.

The proposed demerger is intended to separate the financial services operations from the company’s other businesses. According to the filing, the consumer finance business operates under different industry risks, market conditions and competitive dynamics, requiring a separate strategy.

The resulting entity is expected to operate as an independent company focused on consumer finance and related activities. The filing states that the structure could allow it to attract investors, strategic partners and lenders with an interest in financial services, while enabling a capital structure suited to the business.

Under the proposed share entitlement ratio, eligible shareholders will receive one fully paid-up equity share of Harita ARC, with a face value of Re 1, for every fully paid-up equity share of TVS Motor with a face value of Re 1. The resulting company’s shareholding pattern is expected to mirror that of TVS Motor, based on shareholders’ holdings on the record date specified under the scheme.

The equity shares of the resulting company are proposed to be listed on the stock exchanges, subject to the required statutory and regulatory approvals.

TVS Motor Services to Merge With Listed Company

Separately, TVS Motor Services Limited will be amalgamated with TVS Motor Company. The subsidiary was incorporated to undertake activities including the buying, selling, leasing, servicing and maintenance of vehicles, automotive products, spare parts and related equipment.

TVS Motor said the merger is intended to streamline the group’s corporate structure and consolidate assets and liabilities within a single entity. As TVS Motor Services is a wholly owned subsidiary, no consideration will be payable for the amalgamation, and the listed company’s existing shareholding pattern will remain unchanged under the scheme.

TVS Motor also disclosed that it had acquired the entire equity share capital of Harita ARC Limited from TVS Credit Services Limited, a material subsidiary, for Rs 25,000 in cash. The acquisition covers 2,500 equity shares of Rs 10 each and is being carried out on an arm’s-length basis as a related-party transaction.

Harita ARC was incorporated on August 25, 2017, has paid-up capital of Rs 25,000 and had not commenced business operations as of the filing. It is intended to undertake the consumer finance and related business following implementation of the demerger.

The composite scheme will take effect subject to the applicable approvals and completion of the required procedures.