HDFC To Sell Majority Stake In HDFC Credila In $1.11 Bn Deal

Housing Development Finance Corporation (HDFC) has confirmed its agreement to sell a majority stake of around 90 per cent in its education finance arm, HDFC Credila Financial Services.

The deal, valued at Rs 90.60 billion (USD 1.11 billion), involves a consortium comprised of BPEA, EQT, and ChrysCapital. This transaction marks the largest-ever private equity buyout in India’s financial services sector.

As part of the deal, the consortium has appraised HDFC Credila at a pre-money valuation of Rs 103.50 billion, with a primary infusion of Rs 20 billion planned for the company. The announcement comes ahead of HDFC’s proposed USD 40 billion merger with HDFC Bank, set to be finalised in the coming month.

The Reserve Bank of India (RBI) had previously instructed HDFC to reduce its stake in HDFC Credila to 10 per cent within two years of the merger’s effective date. Following this stake sale, HDFC will retain a 9.99 per cent stake in HDFC Credila.

HDFC has enlisted the services of Jefferies as the exclusive financial advisor for the transaction. However, the completion of the deal is contingent upon obtaining regulatory approvals from the Reserve Bank of India and the Competition Commission of India (CCI), according to HDFC’s statement.

The company expects the entire process, including the fulfillment of all conditions precedent and the receipt of regulatory clearances, to be concluded within 15 business days.