Tata Motors Finance and Net Debt & Others

TATA MOTORS FINANCE

TMF Holdings Limited (TMFHL) became the holding company for the financial services business under the TML umbrella. Tata Motors Finance Limited (TMFL) undertakes the new vehicle financing business and is the captive financier for TML's vehicles. On the other hand, Tata Motors Finance Solutions Limited (TMFSL) is engaged in used vehicle financing business that has strong operational linkages with TML's pre-owned vehicles. TMFSL is also actively engaged in corporate lending wherein it provides both short-term and long-term financing to dealers and suppliers of TML.

Tata Motors Finance focuses on two major segments of vehicle financing: new vehicles and used vehicles. Leveraging the familiarity with the Tata Motors ecosystem, Tata Motors Finance is in a position to mitigate any risks effectively and enjoys 26% market share in Tata Motors’ volumes.

By 2024, Tata Motors Finance targets to have Assets Under Management (AUM) worth Rs.75,000 crore and a Return On Equity (ROE) of 20%, while maintaining Gross Non-Performing Assets (GNPA) at 2.5%. Moving towards this target, it has identified a few action areas which include reducing collection delays and enhancing disbursals

Key action areas

While focusing on enhancing disbursals, Tata Motors Finance is improving its collection strategy in light of the implementation of Ind-AS. It is also widening its liability franchise to manage its cost of borrowings.

Tata Motors Finance is focused on growing its AUM, which recorded a sharp 37% increase in FY 2018-19 from FY 2017-18 levels. Meanwhile, GNPA fell from 4% in FY 2017-18 to 2.6% in FY 2018-19.

NET DEBT & OTHERS

The Tata Motors Group is focused on reducing net debt. The Group's focus is on bringing down the gross debt to EBITDA ratio, improving business performance and reducing the debt through focused and identified divestments.