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Tata Capital sells travel, forex units to Thomas Cook

The sale will allow Tata Capital to exit non-core business segments

Aneesh Phadnis & Abhijit Lele  |  Mumbai 

Thomas Cook
Thomas Cook

In the first reorganisation in the financial services businesses after N Chandrasekaran took over as chairman, the Tata group has decided to sell its foreign exchange and travel services to India.
 
On Monday, said it would sell and Services Ltd and Forex Ltd to for an undisclosed sum. Industry sources pegged the deal size at Rs 15 crore.
 
The sale would allow to exit non-core business segments and would enable to grow its corporate travel business against the backdrop of intensified competition in the space. Online travel portal Yatra.com recently acquired and also forayed into the corporate travel business.

The sale of non-core businesses like travel and foreign exchange has been on the cards for long, say people familiar with the development. The units were making losses and contributed little to the overall business of

The travel services firm posted a loss of Rs 2.63 crore on revenue of Rs 9.11 crore, while the foreign exchange firm, which has a presence in 20 cities, made a loss of Rs 0.57 crore on revenue of Rs 16.67 crore in 2016-17, according to Tata Capital's annual report.

Tata Capital sells travel, forex units to Thomas Cook


and Services acquired ticketing business from Inditravels in 2008 and expanded to include a full suite of travel-related services. Forex started with acquisition of TT Holding & Services in 2010. Both service both Tata and non Tata customers and corporates, a spokesperson said.

Praveen Kadle, managing director and chief executive officer, Tata Capital, said, “Travel and forex services are perfectly poised for rapid and high growth. We are confident that would take this business forward.”
 
and Services handles travel services for a few Tata group but has, over the years, lost business to various other travel management companies, including In recent years, such as Yatra and Riya Travels have also garnered air ticketing business from few group like Tata Consultancy Services.

Madhavan Menon, chairman, group, said, “It strengthens our distribution with a network of about 24 branches and franchises and further strengthens our leadership position in the travel and foreign exchange sector in the country.”

The acquisition creates clear opportunities — including the significant increase in scale and network reach, volume/buying advantages as well as technology gains — all resulting in stronger customer service and stakeholder value, he added.

At present, the corporate travel segment contributes to around 15-20 per cent of Thomas Cook's business.

Menon said Tata Capital's foreign exchange business had transactions of around $300 million and the travel company handled bookings of around $100 million. The company's revenue includes margins and commission earned on these sales. Menon said expected to turn the profitable through synergies and backend integration. 

First Published: Tue, September 26 2017. 01:30 IST
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