Tata Capital Financial Services, Tata Cleantech To Merge With Tata Capital

In a move to create an entity with a stronger capital base and asset size, two subsidiaries of Tata Capital – Tata Capital Financial Services (TCFSL) and Tata Cleantech Capital (TCCL) - will be merging with their parent (Tata Capital), the company said on Tuesday.

 “The board of Tata Capital has approved a proposal for the merger of two of its subsidiaries - TCFSL and TCCL - with itself,” Tata Capital said in a statement.

The boards of TCFSL and TCCL have also accorded their approval.

The merger will require the approval of the National Company Law Tribunal and the Reserve Bank of India (RBI), among others, the statement said.

“The merger will lead to the creation of a unified entity with a wider and stronger capital and asset base, having a greater capacity for conducting its operations more efficiently and competitively,” Tata Capital said.

It said the consolidation of businesses will help in achieving a simplified organisational structure, improve operational and management efficiencies, and streamline business operations and decision-making, apart from better experience for all customers of the combined entity.

The move comes after the RBI identified Tata Capital as an upper-layer non-banking financial company (NBFC) in October 2022.

According to the regulator, upper-layer NBFCs shall comprise those that are specifically identified by the central bank as warranting enhanced regulatory requirements based on a set of parameters and scoring methodology.

The top 10 eligible NBFCs, in terms of asset size, shall always reside in the upper layer, irrespective of any other factor, RBI had said.