Tata Capital Limited (TCL)

COMPETITION COMMISSION OF INDIA

Combination Registration No. C-2023/07/1040

8th August 2023

Notice under Section 6(2) of the Competition Act, 2002, jointly filed by Tata Capital Limited, Tata Cleantech Capital Limited and Tata Capital Financial Services Limited

CORAM:

Ms. Ravneet Kaur
Chairperson

Ms. Sangeeta Verma
Member

Mr. Bhagwant Singh Bishnoi
Member

Order under Section 31(1) of the Competition Act, 2002

1. On 4th July 2023, the Competition Commission of India (Commission) received a Notice under Section 6(2) of the Competition Act, 2002 (Act), jointly given by Tata Capital Limited (TCL), Tata Cleantech Capital Limited (TCCL) and Tata Capital Financial Services Limited (TCFSL) [collectively referred to as Parties]. The parties have filed a copy of the Board Resolution passed by TCL on 28th March 2023, in relation to the proposed combination.

2. The proposed combination would be carried out through the following steps:

• 2.1. TCCL and TCFSL will merge with and into TCL through a scheme filed before the National Company Law Tribunal. Pursuant to the merger, TCL will be the surviving entity; and
• 2.2. as a result of the merger, International Finance Corporation (IFC), an existing shareholder of TCCL, will acquire ~2% shareholding in the surviving entity.

3. TCL is registered with the Reserve Bank of India (RBI) as a Systematically Important Non-Deposit Accepting Core Investment Company (CIC) and primarily holds investments in its subsidiaries and other group companies and carries out only such activities including advising and / or management of private equity funds, as are permitted under the directions and guidelines issued by the RBI for CICs from time to time.

4. TCFSL is a wholly-owned subsidiary of TCL and is registered with the RBI as a Systemically Important Non-Deposit Accepting Non-Banking Financial Company and is mainly engaged in lending services and offering a wide variety of services and products in the financial services sector.

5. TCCL is a subsidiary of TCL and is registered with the RBI as an Infrastructure Finance Company. TCCL engages in the business of providing cash flow-based finance and advisory services for projects in renewable energy, energy efficiency, waste management, water management and infrastructure finance. TCCL is a joint venture between TCL and IFC, with equity holding in the ratio of 80.50:19.50 respectively.

6. IFC, a member of the World Bank Group, is stated to be the largest global development institution focused on the private sector in emerging markets. It works in more than 100 countries, using its capital and expertise to create markets and opportunities in developing countries. IFC primarily provides financial assistance and makes investments in private enterprises, located in its member countries, including India. It also provides advisory services and asset management services. IFC primarily operates its investment activities through its offices in New Delhi and Mumbai.

7. It is observed that the core activities of the parties relate to operations in lending/ financing industry. This industry appears to have the presence of other known players, including banking institutions and specialized players like REC Limited, Power Finance Corporation and Indian Railway Finance Corporation. Considering these factors and that the merger is of two subsidiaries with their common parent, the proposed combination does not appear to raise any competition concern in any of the plausible relevant markets.

8. Considering the material on record, including the details provided in the Notice and the assessment of the proposed combination based on factors stated in Section 20(4) of the Act, the Commission is of the opinion that the proposed combination is not likely to have any appreciable adverse effect on competition in India. Therefore, the Commission approves the proposed combination under Section 31(1) of the Act.

9. This order may be revoked if, at any time, the information provided by the parties is found to be incorrect.

10. The information provided by the parties shall be treated as confidential in terms of and subject to the provisions of Section 57 of the Act.

11. The Secretary is directed to communicate to the parties accordingly.