New Delhi: TVS Motor Company, India’s third-largest two-wheeler maker, may carve out its financial services business, making it the second major two-wheeler manufacturer after Bajaj Auto to pursue such a restructuring.
The rapid growth of its financial services businesses, including TVS Credit and Home Credit, has prompted the group to evaluate a plan to spin off the segment into a separate company, chairman Sudarshan Venu said at the company's annual general meeting on Wednesday. While TVS Credit and Home Credit already operate as separate subsidiaries, a demerger would separate these businesses from the parent companies into independent entities.
TVS Motor held an 85.6% stake in TVS Credit, according to the financial unit's FY26 annual report. TVS Credit is part of the TVS Venu platform, which has interests in mobility, financial services, real estate and lifestyle. TVS Holdings owns an 80% stake in Home Credit, a group subsidiary that offers consumer loans.
“Over the years, the group has made sustained investments in building and nurturing its financial services business, which has evolved into an important part of the broader TVS Venu ecosystem,” Venu said in his address to shareholders. “Looking ahead, the company may, at an appropriate time, in stages, guided by long-term strategic considerations, evaluate alternatives including a possible separation of the financial services business to further strengthen and unlock shareholder value.”
Venu did not clarify the timeline for a possible demerger, which the company has publicly spoken about for the first time.
The TVS Group is sharpening its ambitions in financial services. It set up Galaxy Health Insurance in October 2024 jointly with the family of V. Jagannathan, the former chairman and managing director of United India Insurance and founder of Star Health & Allied Insurance.
In April 2026, the group announced the acquisition of PGIM India Asset Management, including its mutual funds and portfolio management services, from Prudential Financial Inc of the US. In May, the group acquired a stake in Jana Small Finance Bank Ltd, signalling a broader push to build a diversified financial services franchise.
Loan book growth
TVS Credit’s loan book increased by 15% year on year to ₹30,631 crore in FY26 while profit before tax grew by 22% to ₹1,248 crore.
“Our financial services business TVS Credit has had a strong year. Disbursements grew 26% and the company ended the year with an asset base of over ₹30,000 crore, serving over 24 million customers across two-wheelers, consumer durables, tractors and other products,” Venu said.
Analysts noted that TVS Credit’s retail base has grown healthily with the focus on various product categories and distribution channels.
“TVS Credit reported a healthy 15% YoY increase in PBT to ₹3.48bn (Q4). The loan book expanded to ₹306bn, while the customer base crossed 24mn with the addition of 5.3mn new customers during the year. The subsidiary continues to focus on diversifying and strengthening customer acquisition channels,” analysts at brokerage SMIFS wrote in a 14 May note.
Bajaj Auto demerged its Bajaj Financial business in 2007. Today, the Bajaj Finserv business has a market capitalization of more than ₹3 trillion.