Tata Motors to merge Tata Finance with itself

Tata Motors today informed the Bombay Stock Exchange (BSE) that it is considering a proposal to merge Tata Finance with itself. The company will also consider amalgamation of two subsidiaries- Telco Dadajee Dhackjee and Suryodaya Capital & Finance (Bombay) with itself.

The boards of Tata Motors and Tata Finance will meet independently on January 10 (Monday) to consider the proposal, two companies informed the stock exchange.

The speculation on a possible merger of Tata Finance with Tata Motors has been in the air ever since the non-banking finance company of the Tata group was caught into a crisis two years ago. A former managing director had to resign for his alleged involvement in the misappropriation of the company's funds and of insider trading.

Tata Sons, the promoter of Tata Finance, had to infuse nearly Rs 700 crore to put the balance sheet in order.

In an exclusive interview with Business Standard last year, group chairman Ratan Tata had hinted that the merger was on cards.

He had said :"The crisis is over at Tata Finance. We have sold many of the assets of the company. Some of the businesses of the company are gravitating towards being just an auto finance company. It will move closer to Tata Motors."

The Tata Motors stock closed today at Rs 493.25 against the over night close of Rs 495.25. The Tata Finance stock closed at 53.75 today, compared with yesterday's close of Rs 52.25.