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 Tata Capital.
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.
TC Travel and Services acquired ticketing business from Inditravels in 2008 and expanded to include a full suite of travel-related services. Tata Capital Forex started with acquisition of TT Holding & Services in 2010. Both companies 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 Thomas Cook would take this business forward.”
Madhavan Menon, chairman, Thomas Cook 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 Thomas Cook expected to turn the companies profitable through synergies and backend integration.