TVS Motor Company’s Board of Directors has approved a composite scheme of arrangement. This involves the amalgamation of TVS Motor Services Limited with the company and the demerger of its consumer finance and related business into Harita ARC Limited. The scheme aims to simplify the group structure, create focused businesses, and unlock shareholder value, subject to various regulatory approvals.
TVS Motor Board Approves Major Restructuring Scheme
The Board of Directors of TVS Motor Company has given its approval for a composite scheme of arrangement. This significant restructuring initiative, approved on October 28, 2026, aims to reshape the company’s operational and corporate structure. The approval is in line with the company’s strategic goals and disclosure requirements under the Listing Regulations.
Key Components of the Scheme
The composite scheme encompasses two primary actions:
- Amalgamation: TVS Motor Services Limited, the Transferor Company, will be amalgamated with TVS Motor Company, the Transferee Company.
- Demerger: The consumer finance and related business of TVS Motor Company will be demerged into Harita ARC Limited, which will function as the Resulting Company (TVSM WOS).
This demerger will create a separate entity, TVSM WOS, to house the consumer finance and related business, allowing it to operate as an independent platform with a dedicated strategy. The Transferor Company and the Resulting Company are currently wholly owned subsidiaries of TVS Motor Company.
Rationale Behind the Restructuring
The primary objectives of this scheme include:
- Simplifying the group’s corporate structure and consolidating assets and liabilities.
- Creating focused businesses with a clear segregation of the demerged undertaking.
- Enabling the demerged entity to pursue a tailored strategy suited to its industry-specific risks and market dynamics.
- Unlocking the value of the demerged undertaking for the shareholders of TVS Motor Company.
- Establishing an independent company dedicated to consumer finance and related businesses, potentially attracting diverse investors and strategic partners.
Consideration and Shareholding
The scheme involves the issuance of shares by the Resulting Company (TVSM WOS) to the shareholders of TVS Motor Company in proportion to their shareholding. The share entitlement ratio has been determined based on a valuation report dated October 28, 2026, issued by M/s. Bansi S. Mehta Valuers LLP. A fairness opinion on this ratio has been provided by M/s. JM Financial Limited. There will be no cash consideration involved in this scheme. Upon the scheme becoming effective, the shareholding pattern of TVS Motor Company is expected to remain unchanged, while the Resulting Company’s shareholding pattern will mirror that of the Company, with its shares to be listed on the stock exchanges.
Acquisition of Harita ARC Limited
As part of this arrangement, TVS Motor Company has also acquired the entire stake of Harita ARC Limited (“TVSM WOS”). This acquisition, valued at Rs. 25,000/-, is considered a related-party transaction and was conducted on an arm’s length basis. Harita ARC Limited is positioned to undertake the consumer finance and related business after the demerger is implemented.
Approval Requirements
The implementation of this scheme is subject to the receipt of various statutory, regulatory, and customary approvals. These include clearances from the Stock Exchanges (BSE Limited and National Stock Exchange of India Limited), the Securities and Exchange Board of India, the jurisdictional National Company Law Tribunal, and the shareholders and creditors of the involved companies.
Source: BSE
