Chennai, 28 October 2026: TVS Motor Company approved a plan to spin off its consumer finance and related businesses into a separate company, in a restructuring aimed at giving the finance arm greater strategic focus and its own listing. The board approved the composite scheme of arrangement at its meeting on 28 October 2026. Shareholders of TVS Motor will receive one share in the new finance entity for every TVS Motor share held, so the resulting company will have the same ownership structure as the parent.
The consumer finance and related businesses will move into Harita ARC Limited, which TVS Motor is acquiring from TVS Credit Services Limited for 25,000 rupees in cash. Harita ARC will become a wholly owned subsidiary of the company and will house the finance businesses once the demerger takes effect. The acquisition covers 2,500 equity shares with a face value of 10 rupees each, and the transaction was scheduled for completion on 28 October 2026. Harita ARC had not started business operations at the time of disclosure and reported paid-up capital of 25,000 rupees and no turnover.
The scheme is subject to approvals from the stock exchanges, the Securities and Exchange Board of India, the jurisdictional National Company Law Tribunal, and the shareholders and creditors of the companies involved. Until those approvals come through, the demerger remains a proposal rather than a completed separation. Investors will hold their shares as before until the scheme becomes effective.
TVS Motor finance arm and its scale
The undertaking being demerged includes lending, investments, leasing and associated support services. It also includes TVS Motor’s investment in TVS Credit Services and certain other non-core investments, which will sit inside a dedicated holding company structure after the separation. Turnover of the demerged unit stood at about 3,921 crore rupees for the period ended September 2026, out of total group turnover of 35,770 crore rupees, according to company filings. The finance arm is therefore a sizeable business in its own right, rather than a small side operation.
TVS Credit Services is the group’s existing consumer finance arm, financing two-wheelers and other consumer purchases. Moving that business into a separately listed entity lets it raise capital, set its own strategy and be valued on its own numbers, instead of being judged as part of an automotive manufacturer. For the company, the separation leaves a continuing business focused on automotive and mobility operations: motorcycles, scooters and mopeds. The company said the restructuring is intended to improve capital allocation, since a vehicle maker and a lender need different kinds of capital and carry different risks.
The one-for-one share issue means existing shareholders keep proportional ownership in both businesses after the split. A shareholder with 100 shares would hold 100 shares in the new finance company as well as the original 100 shares, once the scheme takes effect. That structure avoids a cash payout and avoids diluting existing holders, and the market will price the two companies separately from listing day.
TVS Motor services merger in the same scheme
The composite scheme has a second leg. TVS Motor Services Limited will merge into TVS Motor Company and be dissolved without winding up. The services arm was set up for activities linked to automobiles, automotive products, spare parts, accessories, leasing, servicing and repairs. The company said the merger is intended to streamline the corporate structure and consolidate assets and liabilities.
A third element sits alongside the demerger. The company will acquire shares in STPL, and through that acquisition it will ultimately hold an additional 2.4 percent in TVS Credit Services Limited after the merger of Home Credit with TVS Credit Services. The scheme tidies the group structure in two directions at once: it folds a wholly owned services arm into the parent, and it lifts the finance businesses out into their own listed vehicle.
What TVS Motor shareholders watch next
The next steps are procedural. The scheme must be filed with the stock exchanges and the regulator, put to shareholders and creditors, and approved by the National Company Law Tribunal. Any objections at those stages can slow the timetable. Shareholders will watch for the scheme document, which should set out the valuation, the share entitlement ratio, the treatment of employees and contracts moving to Harita ARC, and the listing timeline.
For now, the operating picture at the automotive business is unchanged. Both businesses keep operating as before until approvals arrive. The company’s shares rose over 3 percent on 28 October after its quarterly earnings announcement, according to market reports. The board approval gives shareholders a restructuring to follow through the approval process.