India's largest lender State Bank of India may take a 49 percent stake in Tata Motors Finance, the vehicle financing unit of Tata Motors, the Mint newspaper said on Tuesday.
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, citing two people familiar with the deal.
"Tata Motors has said in the past that it is committed to deleveraging the firm through divestments and capital raising at an appropriate time," Tata Motors spokesman Debasis Ray was quoted as saying by the newspaper.
He told the paper that specifics would be announced as and when anything was finalised. State Bank of India officials could not be immediately reached for comments.
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 percent to 130 billion rupees ($2.8 billion), from a year earlier, the paper said. At the end of December 2009, Tata Motors Finance''s book size stood at 64.9 billion rupees, its website showed.
