TVS Motor Company moves to unbundle mobility, consumer finance business

The board of TVS Motor Company, part of the TVS VENU Group, on Wednesday cleared the demerger of its consumer finance and related business undertaking into a separate holding company, Harita ARC Ltd. It also approved the merger of wholly owned subsidiary TVS Motor Services Ltd with TVS Motor.

As part of the composite scheme of arrangement, the Chennai-based company's consumer finance and related activities, including lending, investments, leasing and associated support services, will be transferred to Harita ARC. Shareholders of the company will receive an equal number of shares in the resulting company as in TVS Motor, enabling them to participate in the future growth of both the mobility and consumer finance businesses. The turnover of the new consumer finance entity was Rs 3,921 crore during the first six months of the financial year ended on September 30, out of the company's total turnover of Rs 35,770 crore.

“We believe this new structure will create additional value for stakeholders while providing these businesses with greater strategic autonomy. The demerger will allow them to pursue opportunities across consumer finance and related sectors and allocate capital in line with their growth priorities,” said Sudarshan Venu, chairman, TVS Motor Company. 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 part of the multi-step scheme, the board has cleared TVS Motor’s acquisition of Harita ARC from TVS Credit Services Ltd for Rs 25,000 in cash. Through this, Harita will become a wholly owned subsidiary of TVS Motor that will have the consumer finance business after the demerger. At present, TVS Group’s non-banking financial company TVS Credit, along with Home Credit India, serves more than 45 million customers across 100,000 touchpoints. Last July, TVS Holdings' arm Home Credit India Finance acquired a 100 per cent stake in education finance company Varthana Finance for Rs 967 crore in an all-cash deal. Early this year, TVS Motor also acquired a minority stake in Jana Small Finance Bank.

“This will further strengthen and unlock shareholders’ value. The shareholders can participate in both mobility and financial services businesses,” said K N Radhakrishnan, chief executive officer of TVS Motor. In August 2026, the NBFC companies within the group approved a proposal to merge and consolidate the group’s consumer finance businesses into a single operating platform. The proposed demerger is the next step in this strategic process and is intended to segregate the consumer finance and related businesses from TVS Motor into a dedicated platform and reflects the group's long-term conviction in India's financial services sector and its role in supporting economic growth, financial inclusion and rising aspirations across the country.

In addition, the board also approved the acquisition of a controlling interest in STPL Trading and Services Private Limited, which is in the process of merging with TVS Credit Services. Pursuant to this, the company will effectively get an additional 2.4 per cent holding in TVS Credit Services after the consummation of the merger.

Separately, TVS Motor Services, which looks into the buying, selling, leasing, servicing and maintenance of vehicles, automotive products, spare parts and related equipment, will also be amalgamated with TVS Motor Company.

"Driven by digitisation, expanding credit access and the aspirations of India's growing middle class, financial services are playing an increasingly important role in one of the world's fastest-growing large economies. At TVS VENU, we have built a meaningful presence and capabilities in this sector through sustained investments over 15 years. The businesses being demerged have developed strong capabilities, customer relationships and platforms that position them well for the future,” Venu said.