HDFC Credila sale for ₹9,060 crore to be done in 15 days post approvals

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Housing Development Finance Corporation (HDFC) said the sale of 90 percent stake in its wholly owned subsidiary HDFC Credila, the largest private equity buyout in the Indian financial services sector, will be completed within 15 working days after receiving the required approvals.

As per the agreement of June 19, HDFC will sell 13.3 crore shares of HDFC Credila to Kopvoorn BV, Moss Investments, Defati Investments Holding BV and Infinity Partners for Rs.9,060 crore. The transaction is subject to approvals from RBI and CCI.

Kopvoorn BV is part of the BPEA EQT Group, while Moss Investments, Defati Investments Holding BV and Infinity Partners are part of the ChrysCapital Group. The consortium has valued HDFC Credila at a pre-money valuation of Rs 10,350 crore and will broadcast Rs 2,000 crore as initial proceeds.

“We have followed HDFC Credila for several years and are excited to partner with its strong management team led by Arijit Sanyal. Looking ahead, BPEA EQT plans to accelerate HDFC Credila’s digital transformation and invest significantly in the company’s continued growth,” said Jamie Mahtani, Partner and Head of BPEA EQT India.

After the transaction, HDFC Credila will cease to be a subsidiary of HDFC, whose shareholding will be reduced to 9.99 percent. HDFC will have the right to nominate one non-executive director to the HDFC Credila Board of Directors, and will have the usual preemptive rights under the Shareholders Agreement.

Established in 2006, Mumbai-based HDFC Credila has reported a total revenue of ₹1,352 crore for FY23, with a net worth of ₹2,435 crore as of March 2023. It has extended loans to more than 1.24 thousand customers and has a loan book of approx. 15,000 crore. .

The long cut-off date for the sale is March 31, 2024, HDFC said, adding that the deal was executed “in a very tight time frame” with the entire process up to signing completed within 54 days.

Jefferies was the sole financial advisor and AZB & Partners was the legal advisor to HDFC and HDFC Credila in the transaction.

“The company has built an impressive position in India’s education finance market and has continued to maintain very high asset quality. We believe the business is well positioned to continue its strong growth momentum under its new shareholders,” said Kiki Mistry, CEO of HDFC.