Three TVS group NBFCs plan merger

CHENNAI, March 24: Harita Finance Ltd and TVS Lakshmi Credit Ltd, both Chennai-based non-banking finance companies (NBFCs) under the TVS stable, are to be merged. Harita Srinivasa Finance (P) Ltd, a newly incorporated company, is also to be merged. The merged entity will ultimately have a new name that is yet to be decided. The effective date of the merger has been fixed as April 1, 1998, subject to the approval of the High Court of Madras and the shareholders of the respective companies. All the companies are controlled by the Venu Srinivasan group in TVS.

The recent RBI guidelines giving thrust to capital adequacy and rating had put both these companies under pressure as public deposits are the main source of funds, thanks to the tremendous goodwill of the TVS group. As per the NBFC guidelines issued in January and revised later, Harita Finance can have public deposits of only 1.5 times its net worth of Rs 12.70 crore which works out to Rs 19 crore while TVS Lakshmi credit can have a deposit base of Rs24 crore. Against this, Harita and TVS Lakshmi Credit Ltd has a deposit base of Rs 105.12 crore and Rs 72 crore respectively.