HDFC to sell majority stake in HDFC Credila to BPEA EQT and ChrysCapital

HDFC and its subsidiaries have agreed to sell a majority stake in HDFC Credila Financial Services to an investor consortium comprising BPEA EQT and ChrysCapital at a pre-money valuation of INR 10,350 crores.

The deal signifies the largest private equity buyout ever in India’s financial services sector.

HDFC Credila is an Indian non-bank lender in the education finance space.

In addition to the purchase, the investors will infuse approximately INR 2,000 crores of primary proceeds into the company. HDFC Limited will retain a 9.99% stake in HDFC Credila, signifying ongoing interest and belief in the company’s potential.

Keki Mistry — HDFC Limited CEO 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.”

Despite the magnitude of the transaction, the process was completed with impressive speed, wrapping up in just 54 days from initiation to signing. Jefferies functioned as the exclusive financial advisor to HDFC Limited and HDFC Credila throughout the transaction.

Established in 2006, Mumbai-based HDFC Credila is a key player in the Indian education financing market, providing loans to students pursuing higher education in India and abroad. The non-banking finance company (NBFC) has extended loans to more than 1.24 lakh customers since its inception, with a current loan book exceeding INR 15,000 crores.

Jimmy Mahtani — BPEA EQT India Partner and Head said: “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.”

The completion of the transaction is now subject to obtaining regulatory approvals from the Reserve Bank of India (RBI) and the Competition Commission of India (CCI).