SBI may pick up 49 per cent in Tata Motors Finance: report
16 February 2010
State Bank of India, the country's largest lender, may pick up a 49-per cent stake in Tata Motors Finance, the vehicle financing unit of Tata Motors Ltd, the Mint newspaper said in a report on Tuesday quoting two persons ''familiar with the development''.
A stake in the Tata Motors unit would allow the bank to expand into the trucks and buses segment where it currently has no presence, the report said, adding that the sources refused to be identified as the deal was not finalised.
"Tata Motors has said in the past that it is committed to deleveraging the firm through divestments and raising capital at an appropriate time," Tata Motors spokesman Debasis Ray was quoted as saying by the newspaper. He added that specifics would be announced as and when anything was finalised.
The state-run bank has boosted its car loans business, even as other banks have exited the segment, by offering interest rates as low as 8 percent, the report said.
In the quarter ended December, its auto loan disbursals rose 46.35 per cent to Rs13,000 crore from a year earlier, the paper said. At the end of December 2009, Tata Motors Finance's book size stood at Rs6,490 crore, its website showed.