A consortium of private equity firms, including BPEA EQT and ChrysCapital, has acquired a 90 per cent stake in HDFC Credila Financial Services for Rs 9,060 crore, HDFC Ltd said.
The sale of HDFC Credila, the education loan arm of the Housing Development and Finance Corporation (HDFC), comes ahead of the completion of HDFC's merger with HDFC Bank. In April, the RBI had asked HDFC to reduce its stake in Credila to under 10 per cent over the next two years.
"HDFC Ltd, HDFC Bank Ltd and HDFC Credila Financial Services Ltd, today announced they have entered into definitive agreements to sell a majority stake in HDFC Credila to an investor consortium of BPEA EQT and ChrysCapital," HDFC said in a stock exchange filing on Tuesday.
The total revenue of HDFC Credila during the 2022-23 fiscal was Rs 1,352.18 crore and its net worth as on March 31, 2023, was Rs 2,435.09 crore.
The PE consortium includes Kopvoorn B.V., Moss Investments Ltd, Defati Investments Holding B.V. and Infinity Partners.
Kopvoorn BV is part of the BPEA EQT group, and Moss Investments, Defati Investments Holding B.V. and Infinity Partners are part of the ChrysCapital group, HDFC said in a late-night regulatory filing on Monday.
"The consortium valued HDFC Credila at a pre-money valuation of Rs 10,350 crore and will infuse primary proceeds of Rs 2,000 crore into the company," HDFC said.
HDFC will retain a 9.99 per cent stake in HDFC Credila, which provides education loans to students pursuing higher education in India and overseas. The company has extended loans to over 1.24 lakh customers since its inception with the current loan book at over Rs 15,000 crore.
"We believe the business is well positioned to continue its strong growth momentum under its new shareholders," HDFC CEO Keki Mistry said.
Jimmy Mahtani, Partner and Head at BPEA EQT India said looking ahead, BPEA EQT plans to accelerate HDFC Credila's digital transformation and invest significantly in the company's continued growth.
"Growing demand for quality higher education, the trend of parents and students increasingly looking overseas for higher education, and the underpenetrated formal financing market make it an attractive space with long-term tailwinds,” Chryscapital Advisor'ssector lead Ankit Singhal said.
Chryscapital's partner and chief investment officer Sanjay Kukreja said more than a fourth of its deployments are in the financial services sector, which also accounts for a third of its realisations.
Chryscapital led funds plan to invest over USD 250 million.