HDFC divests 90% stake in HDFC Credila: All you need to know about the Rs 9,060 cr deal

On Monday, HDFC announced that it brought down its shareholding in HDFC Credila Financial Services, a wholly-subsidiary of the corporation, to 10 per cent, following Reserve Bank of India’s (RBI) advice. Headquartered in Mumbai, India, HDFC Credila is a dedicated education loan company.

The corporation executed definitive documents on June 19, proposing the divestment or sale of approximately 13,29,49,207 equity shares of HDFC Credila, amounting to 90 per cent of HDFC Credila’s total issued and paid-up share capital. Following the transaction, HDFC Credila will cease to be a part of the corporation and HDFC’s shareholding in the company would be less than 10 per cent.

A consortium, led by BPEA EQT group and ChrysCapital group, will buy into the 90 per cent shareholding.

Here’s all you need to know about the HDFC Credila deal:

• The acquirers of the 90 per cent of HDFC Credila include Kopvoorn BV, part of the BPEA EQT group, and Moss Investments, Defati Investments, Infinity Partners, part of the ChrysCapital group.
• The investment agreement was proposed on June 19, and the transaction is expected to close by 15 business days from the completion of all conditions and regulatory approvals. The long stop date is March 31, 2024.
• The deal was signed for a consideration of Rs 9060,48,84,570.50 (over Rs 9,060 crore).
• The corporation that holds 100 per cent of HDFC Credila’s total issued and paid-up share capital, will sell approximately 13,29,49,207 equity shares to the acquirers.
• The corporation, HDFC, will have the right to nominate one non-executive nominee director on the board of HDFC Credila on terms agreed under the Shareholders’ Agreement.
• HDFC will also have customary pre-emptive rights under the Shareholders’ Agreement.
• Arijit Sanyal, CEO of HDFC Credila said that he is very optimistic about the company’s future and added, “Our association with such marquee investors is expected to fuel the next chapter in HDFC Credila's journey and enable us to scale new heights. We also welcome HDFC's decision to retain 9.99 percent stake in the Company and look forward to our continued association."
• Jimmy Mahtani, Partner and Head of BPEA EQT India, said that the demand in India to obtain a higher education is growing at a faster pace than ever with students striving 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 minority stake in the business and we see their continued support as a testament to our vision for the company."

Also read: HDFC signs pact for sale of 90% stake in HDFC Credila for Rs 9,060 crore