HDFC Bank completes stake sale in HDFC Credila for ₹9,553 cr

HDFC Bank Ltd on Wednesday said it has completed the process of stake sale in education finance unit HDFC Credila Financial Services Ltd to a consortium of private equity companies BPEA EQT and ChrysCapital for ₹9,552.73 crore.

"HDFC Bank, has, as of March 19, 2024, sold 14,01,72,180 equity shares of HDFC Credila to the Acquirers. Accordingly, HDFC Credila has ceased to be a subsidiary of HDFC Bank," an exchange filing by India’s biggest private lender shows.

The completion of the deal comes following the RBI's nod for the sale of around 90% stake in HDFC Credila. The deal represents the "largest-ever private equity buyout" in the Indian financial services sector.  

HDFC Bank had executed the said definitive documents on June 19, 2023, as a party being the successor entity of HDFC Ltd. The bank merged with its housing lender parent HDFC on July 01, 2023, and accordingly, the entire investment of HDFC in HDFC Credila was transferred to HDFC Bank. 

The acquirer companies include Kopvoorn B.V., Moss Investments Limited, Defati Investments Holding B.V., and Infinity Partners. Kopvoorn B.V., is part of the BPEA EQT Group, Moss Investments Ltd, Defati Investments Holding B.V. and Infinity Partners are part of the ChrysCapital group. 

HDFC Credila's revenue during FY2022-23 stood at ₹1,352.18 crore, while its net worth as of March 31, 2023 was ₹2,435.09 crore. Established in 2006 and headquartered in Mumbai, HDFC Credila claims to be one of India’s premier non‐bank lenders in the education finance space. It provides education loans to students pursuing higher education in India and overseas. It claims to have extended loans to over 1.24 lakh customers, with the current loan book at over ₹15,000 crore. 

HDFC Bank shares are today trading 0.40% down at ₹1,442.90 on the BSE. The stock opened a gap down at ₹1,448.80 and fell to an intra-day low of ₹1,424.75. At the current price, the share is trading 17.8% down as compared to the 52-week high of ₹1,757.80 touched on July 03, 2023. The banking heavyweight's current market cap stands at ₹10,97,522.31 crore.

During Q3 FY24, HDFC Bank posted healthy credit growth of 17% YoY and 5% QoQ on the merged basis, backed by strong momentum in retail mortgages and commercial rural banking. However, deposit growth was relatively moderate at 17% YoY and 2% sequentially. HDFC Bank’s net interest income stood at ₹28,471 crore in Q3 FY24, up 4% QoQ, and up 23.9% YoY. The bank’s net profit stood at ₹16,373 crore.