Blackstone, ADIA are potential bidders for HDFC’s Credila

Abu Dhabi Investment Authority (ADIA), GIC of Singapore, Blackstone, BPEA EQT (formerly Baring Private Equity Asia), and Warburg Pincus are some of the contenders that have shown interest in acquiring a stake in HDFC Credila Financial Services Ltd (Credila). The people told on condition of anonymity.

Among lenders, IndusInd Bank and Kotak Mahindra Bank are considering a bid for Credila, one of India’s largest education loan financiers, said one of the people, adding Tata Capital was also interested, but with a restricted shareholding structure may have decided to bid due to

The ever-increasing number of Indians pursuing higher education, as well as the rising cost of education both in India and abroad, have led to a steady rise in the demand for education loans in the country.

Warburg Pincus already holds a majority stake in rival education loan financier Avanse Financial Services Ltd, while Blackstone holds a majority stake in mortgage lender Aadhar Housing Finance. BPEA EQT has a minority stake in RBL Bank, while GIC and ADIA have investments in several Indian lenders. GIC also has a stake in HDFC.

Spokespeople for Blackstone and ADIA declined to comment, while email queries sent to spokespersons for BPEA EQT, Warburg Pincus, GIC, Tata Capital, Kotak, IndusInd Bank and HDFC went unanswered. HDFC selected Jefferies Financial Group Inc. to manage the sale of Credila and may seek a valuation of $1 billion (approx). 8,100 crore), said one of the two people.

Last week, HDFC Chief Executive Officer Keki Mistry said the company had received multiple bids for its Credila stake without naming the bidders.

The mortgage lender is required to bring down its stake in HDFC Credila to 10% over the next two years and stop taking on new customers, as per the Reserve Bank of India’s (RBI) directive for its merger with HDFC Bank.

Mistry said, “There are different kinds of people calling and putting in bids, and we’re still rolling that all out.” a buyer.

Brothers Anil and Ajay Bohora founded Credila Financial Services in 2006 as an education loan financier.

A year later, DSP Merrill Lynch bought a 40% stake in the lender. HDFC acquired DSP Merrill Lynch’s stake in Credila in 2009, following the acquisition of DSP Merrill Lynch by Bank of America.

The Bohora brothers exited HDFC Credila in December 2019, with HDFC acquiring around 9.12% ownership 395 crores ($56 million), HDFC Credila is valued at $614 million (approx.) 4,331 crore).

As on March 31, Credila’s loan book stood at 15,238 crores. net profit increased to 276 crores in the year ended 31 March 206 crores in FY22. Its gross non-performing assets ratio stood at 0.17% as on March 31, as against 0.24% as on December 31.