TVS Motor Company to acquire Harita ARC and demerge consumer finance unit

Mergers & acquisitions
Automobiles - 2 And 3 Wheelers

Blacklitt Research28 October 20263 min read

TVS Motor Company (NSE: TVSMOTOR) said its board approved, on 28 Oct 2026, the acquisition of Harita ARC Limited for ₹25,000 and a composite scheme that demerges its consumer finance business into that company, it said in a filing on 28 Oct 2026. The scheme also amalgamates TVS Motor Services Limited into the company.

Key highlights

Acquisition consideration: ₹25,000 cash for 100% of Harita ARC Limited
Demerged undertaking turnover: ₹3,921 crore for the period ended 30 Sep 2026
Harita ARC shares to issue: 47,50,87,114, one for every TVS Motor share
Post-scheme promoter holding in Harita ARC: 50.27%

The scheme in numbers

Item	Detail
Target of acquisition	Harita ARC Limited (TVSM WOS), paid-up capital ₹25,000
Consideration	₹25,000 cash for 2,500 equity shares, 100% of the target
Demerged turnover	₹3,921 crore, against company turnover of ₹35,770 crore
Share entitlement	1 Harita ARC share of face value ₹1 for every 1 TVS Motor share
Shares to be issued	47,50,87,114 equity shares
Post-scheme holding	Promoters 50.27%, public 49.71%
Transferee net worth	₹13,808.53 crore as on 30 Sep 2026

The acquisition and the demerger

The filing says the acquisition of Harita ARC Limited is a related party transaction, because the shares are bought from TVS Credit Services Limited, a subsidiary of the company, on an arm's length basis. The company says Harita ARC is being acquired to carry on the consumer finance and related business after the demerger, and that it is yet to commence any business operations.

The demerger moves the consumer finance and related business, with a turnover of ₹3,921 crore for the period ended 30 Sep 2026, out of TVS Motor. That is about 11.0% of the company's total turnover of ₹35,770 crore. The company gives its rationale as simplifying the group structure and allowing the consumer finance business a separate strategy suited to its industry-specific risks.

Share entitlement and the smaller merger

The share entitlement ratio was set on a valuation report dated 28 Oct 2026 by Bansi S. Mehta Valuers LLP, and JM Financial Limited gave a fairness opinion on that ratio. Under the scheme, TVS Motor Services Limited is dissolved without being wound up; the filing says no consideration is discharged for it because it is wholly owned.

The company's latest quarterly results, filed the same day, show consolidated total income of ₹16,453.72 crore for Q1 FY27. The filing does not say how the demerger affects those results.

What the scheme means for TVS Motor's shareholders

Existing TVS Motor shareholders would receive Harita ARC shares in proportion to their holdings, while the company's own shareholding pattern is stated to stay unchanged. The scheme needs approvals from BSE, the National Stock Exchange, SEBI, the National Company Law Tribunal and shareholders and creditors, and the filing does not give their timing.

Not stated: the reason for the ₹25,000 price beyond the nominal figure, any funding beyond initial capital, the valuation figures, the fairness opinion outcome, the effective and record dates, and the financial effect on TVS Motor's results. The next step is the submission of the scheme to the Stock Exchanges, after which it will be on the company website.

Reference: Original filing (PDF)

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