Tata Motors, India’s largest automaker, is keen to sell a stake in its financing arm, a senior official said on Tuesday.

“We are looking at various options of offloading stake,” vice chairman Ravi Kant told Reuters.

The company reportedly has been divesting holdings in group firms to raise funds and, last year, sold a stake in Tata Steel to pay down debt for its Jaguar Land Rover purchase from Ford.

The Mint newspaper reported earlier that India’s largest lender, State Bank of India, might take a 49% stake in Tata Motors Finance.

Reuters cited the paper as saying the state-run bank had boosted its car loans business, even as other banks had exited the segment, by offering interest rates as low as 8%. In the quarter ended December, its auto loan disbursals rose 46.35% to INR130bn (US$2.8bn), from a year earlier, it said. At the end of December 2009, TATA Motors Finance‘s book size was INR64.9bn, its website showed.

Tata Motors is also expecting a rise in prices of commercial vehicles, according to the news agency.

“It can go up by 1-2%. New emission norms require new technologies, therefore prices will have to go up,” commercial vehicles head Ravi Pisharody said.

Tata Motors also said it had bid to supply 1,000 bullet-proof vehicles to the Indian army for a total value of INR3.5bn. The company said it was offering a range of defence products, including combat vehicles and troop carriers. It would be compete with local manufacturers such as utility vehicle maker Mahindra & Mahindra and trucks and bus maker Ashok Leyland for defence contracts.

Under a new policy last year, India allowed domestic firms to bid for large defence contracts and officials have estimated the market has a potential size of $100bn over the next 10 years, the news agency noted.