BPEA EQT and ChrysCapital to acquire 90% stake in HDFC Credila

HDFC Limited, HDFC Bank Limited and HDFC Credila Financial Services Limited ("HDFC Credila"), have entered into definitive agreements to sell a majority stake in HDFC Credila to an investor consortium of BPEA EQT and ChrysCapital. HDFC Credila is the one of the largest non‐bank lenders in the Indian education financing market.

The consortium valued HDFC Credila at a Pre‐Money Valuation of INR 10,350 crores and will infuse primary proceeds of c. INR 2,000 crores into the company. HDFC Limited will continue to remain invested with a stake of 9.99% in HDFC Credila.

Jefferies acted as the exclusive financial advisor to HDFC Limited and HDFC Credila on the transaction. The transaction represents the largest ever private equity buyout in the Indian financial services sector. The transaction was run on a very tight timeline with the entire process up to signing being completed in just 54 days.

Established in 2006 and headquartered in Mumbai, HDFC Credila is one of India's premier non‐bank lenders in the education finance space. The NBFC provides education loans to students pursuing higher education in India and overseas. The Company has extended loans to over 1.24 lakh customers since inception with the current loan book at over INR 15,000 crore.

Mr. Keki Mistry, CEO, HDFC Limited, said, "We are delighted to have reputed investors like BPEA EQT and ChrysCapital in HDFC Credila. The company has built an impressive position in the education financing market in India and has continued to maintain a very high asset quality. We believe the business is well positioned to continue its strong growth momentum under its new shareholders."

Mrs. Renu Sud Karnad, Managing Director, HDFC Limited said, "We look forward to having BPEA EQT and ChrysCapital as our partners in HDFC Credila. We have nurtured HDFC Credila's business so far and will take the company through the next phase of growth together with the new shareholders. HDFC Credila has established a strong position in the education financing market. We are proud of the company's performance and wish to see it achieve greater heights."

Mr. V Srinivasa Rangan, Executive Director, HDFC Limited and Chairman, HDFC Credila Financial Services Ltd., said, "We welcome BPEA EQT and ChrysCapital as our partners in HDFC Credila. We look forward to having their valuable support as the company continues to target the large market opportunity in the education financing space while maintaining a high‐quality book delivering profitable growth."

Mr. Jimmy Mahtani, Partner and Head of BPEA EQT India, commented, "The demand in India for obtaining a higher education is growing at a faster pace than ever, accelerated by our country's growing middle class and students' strive for better career opportunities. Coming out of HDFC Group, one of India's most respected and well‐established financial conglomerates, HDFC Credila plays a critical part in serving this demand. We have been following HDFC Credila for several years and we are excited to partner with its strong management team led by Arijit Sanyal. We also welcome HDFC Group's decision to retain a 9.99% stake in the business and we see their continued support as a testament to our vision for the company. Looking ahead, BPEA EQT plans to accelerate HDFC Credila's digital transformation and invest significantly in the Company's continued growth."

Mr. Sanjay Kukreja, CIO ChrysCapital said "ChrysCapital is excited to partner with BPEA EQT and help support HDFC Credila in its next leg of growth. Higher education finance is an attractive space with long term tailwinds, and we believe HDFC Credila being a strong market player is well positioned to capitalize on the growth momentum and deliver strong outcomes for all stakeholders under the stewardship of Arijit Sanyal, MD and CEO and the broader management team."

Mr. Aashish Agarwal, Country Head, Jefferies India said, "The higher education financing market in India represents a massive opportunity. HDFC Credila's management team led by CEO Arijit Sanyal, under guidance of the Board, has built a leading position in the segment. We believe backing from the marquee investor consortium comprising BPEA EQT and ChryCapital will propel the business into its next leg of growth and create significant shareholder value."

The transaction is subject to regulatory approvals from the RBI and CCI.

AZB & Partners acted as the legal advisor to HDFC Limited and HDFC Credila on the transaction.

Wadia Ghandy & Co. acted as the legal advisor to HDFC Bank Limited on the transaction.

Shares of Housing Development Finance Corporation Limited was last trading in BSE at Rs. 2654.95 as compared to the previous close of Rs. 2651.15. The total number of shares traded during the day was 120991 in over 6911 trades.

The stock hit an intraday high of Rs. 2669.00 and intraday low of 2646.40. The net turnover during the day was Rs. 321721686.00.

Source : Equity Bulls

Keywords

HousingDevelopmentFinanceCorporation INE001A01036 HDFC StakeSale HDFCCredila BPEAEQT ChrysCapital