TVS Holdings520056Scheme of arrangement

Subsidiary board approves scheme to merge wholly owned arm and demerge consumer finance business

Buying 100% of Harita ARC Ltd – 2,500 equity shares of Rs. 10 each – for Rs. 25,000/- in cash from TVS Credit Services Ltd.

By ScoutQuest · Wed 28 Oct 2026, 9:18 PM IST · 3 min read

100%Shareholding acquired in Harita ARC

Shareholding acquired in Harita ARC: 100%.

Harita ARC acquisition consideration: 2,500 equity shares of Rs. 10 each for Rs. 25,000/- in cash
Demerged undertaking turnover (period ended 30 Sep 2026): Rs. 3,921 Crore, out of total turnover of Rs. 35,770 Crore
TVS Motor Services (merging entity) financials as on 30 Sep 2026: Total assets Rs. 251.44 Cr; net worth Rs. 198.93 Cr; turnover Nil

What the update says

TVS Holdings has passed on an intimation it received from its subsidiary, TVS Motor Company Limited. The subsidiary's board met on 28 October 2026 and approved two connected steps: first, buying the whole of Harita ARC Limited, and second, a composite scheme of arrangement that merges one wholly owned subsidiary into TVS Motor Company and splits off the consumer finance business into Harita ARC.

Step one: the Harita ARC acquisition

TVS Motor Company acquired 100% of Harita ARC Limited from TVS Credit Services Limited, a material subsidiary of the company.
The purchase was 2,500 equity shares of Rs. 10 each for a cash consideration of Rs. 25,000/-.
Harita ARC had paid-up capital of Rs. 25,000/- and turnover of Nil; it is yet to commence business operations.
It belongs to the Financial Services industry and is being acquired to carry on the consumer finance and related business once the demerger is implemented.
The update describes the transaction as a related party transaction done on an arm's length basis, and states no governmental or regulatory approvals were required for the acquisition.

Step two: the composite scheme

Amalgamation: TVS Motor Services Limited, a wholly owned subsidiary, merges into TVS Motor Company. Because it is a wholly owned subsidiary, no consideration is being paid and no valuation was undertaken; the update says there will be no change in the existing shareholding pattern of TVS Motor Company from this merger.
Demerger: the consumer finance and related business — lending, investment and leasing activities and allied support services — moves from TVS Motor Company into Harita ARC on a going concern basis.
What shareholders get: Harita ARC will issue its shares to the shareholders of TVS Motor Company in proportion to their shareholding in TVS Motor Company.

Size of the business being demerged

The turnover of the demerged undertaking for the period ended 30 September 2026 was Rs. 3,921 Crore, out of the total turnover of Rs. 35,770 Crore of TVS Motor Company.

Size of the merging entity

TVS Motor Services Limited, as on 30 September 2026, had total assets of Rs. 251.44 Cr and a net worth of Rs. 198.93 Cr, with turnover of Nil. It was incorporated to carry on the business of buying, selling, leasing, servicing and dealing in automobiles, automotive products, spare parts, components, accessories and allied equipment, and to provide repair and maintenance support.

Why the company says it is doing this

To simplify the group structure and create focused businesses, with the demerged undertaking and the remaining business operating as independent platforms.
The consumer finance business, in the company's view, needs a separate strategy suited to its own risks, market dynamics and growth path, and faces a different competitive landscape.
The stated benefits include unlocking value of the demerged undertaking for shareholders, creating a company focused exclusively on consumer finance, and attracting investors, partners and lenders with a specific interest in that sector.
For the merger, the stated rationale is streamlining the group corporate structure and consolidating assets and liabilities for operational synergies.

What still has to happen

The scheme is subject to statutory, regulatory and customary approvals, including from BSE Limited and the National Stock Exchange of India Limited, the Securities and Exchange Board of India, the jurisdictional National Company Law Tribunal, and the shareholders and creditors (as applicable) of the companies involved.

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