Tata Motors Shifts its Defense Business to Tata Advanced Systems

Tata Motors Ltd (TML) completes the transfer of its defence business to Tata Advanced Systems Ltd (TASL) for an upfront consideration of Rs.227.7 crore.

The transfer has been concluded through a slump sale according to the scheme of arrangement permitted by National Company Law Tribunal (NCLT) at Mumbai and Hyderabad.TML has been in the defence sector for several decades now. At present it has a wide portfolio of logistics, combat support and armoured vehicles for the defence, state police forces and paramilitary.

Lately, the company has also been focused on developing armoured carriers and platforms such as wheeled amphibious armoured fighting vehicles, mine protected and light armoured multi-role vehicles.

TML has associated with Indian defence establishment in various strategic programmes similar to MRSAM, Agni, Aakash and BrahMos. It also exports a range of defence vehicles to SAARC, ASEAN and African nations.

The deal of defence business to TASL is in line with Tata Group's strategy of consolidating the defence businesses under a single entity to get scale and synergy. TML states that it would continue to play a crucial role in the value chain by supplying chassis and aggregates to TASL for creating specialised defence applications while continuing to supply pure civilian passenger and commercial vehicles to defence forces directly.

TASL would invest in enhancing design and development capabilities for stretching the global footprint and providing specialist, high value-added, futuristic solutions to defence customers in and outside India.

The consolidation is expected to yield benefits in the form of operational and financial synergies, aiding to deliver better value for both the entities. Over the next several months, TML and TASL would operate closely to ensure smooth shift of the defence business.