In a significant development within the financial services sector, TVS Holdings Ltd has announced its acquisition of an 80.74% stake in Home Credit India Finance Pvt Ltd (HCIFPL), a leading player in the consumer financing and personal loans segment.
The acquisition, valued at Rs 554.06 crore, marks a strategic move by TVS Holdings to expand its presence in the consumer finance sector and bolster its portfolio in line with evolving market trends.
Home Credit India Finance, renowned for its unsecured loan offerings and strong foothold in consumer financing, is set to become a subsidiary of TVS Holdings while retaining its brand identity and operational autonomy. This acquisition aligns with TVS Holdings’ overarching strategy to diversify its business interests and capitalize on emerging opportunities in the financial services domain.
According to TVS Holdings’ regulatory filing, the acquisition entails the purchase of 88,09,45,401 equity shares of HCIFPL from Home Credit India BV, a Netherlands-based entity, and Home Credit International AS, headquartered in the Czech Republic. The transaction, subject to requisite approvals, signifies a significant milestone in TVS Holdings’ growth trajectory and underscores its commitment to strategic expansion initiatives.
JM Financial was the exclusive financial advisor and Khaitan & Co was the legal advisor to Home Credit Group in India
Commenting on the acquisition, TVS Holdings highlighted the synergies between the two entities and emphasized HCIFPL’s potential to benefit from the resources and support of its new parent company. The acquisition is expected to enhance operational efficiencies, foster innovation, and drive sustained growth in the consumer finance segment.
The proposed transaction is contingent upon regulatory approvals from the Reserve Bank of India (RBI), pertaining to changes in control and the composition of the board of directors. Additionally, TVS Holdings is mandated to secure approval from the Competition Commission of India (CCI) under the Competition Act, 2002, for the completion of the acquisition process.
“We expect the deal to be completed by the end of 2024, so for now we are very much focusing on ‘business as usual.” You will be hearing from me more on Monday in the townhall,” said Ondrej Kubik, Chief Executive Officer, Home Credit India Finance in a letter to the employees of the company.
“Today marks an exciting milestone in the Home Credit India story. We have announced that the business will be acquired by a group of investors led by TVS Holdings, a Large Indian Conglomerate with Financial, Insurance and Automotive business arms. One of the reasons that they decided to acquire this business is you, the teams that have made this business a success. In just over a decade, we have built a vibrant and exciting business that has caught the eye of investors. I want to personally thank you all for your efforts in developing our Brand and I want to thank you for your ongoing commitment to Home Credit India,” he added.
As both companies embark on this transformative journey, industry analysts anticipate the consolidation of strengths and capabilities to create a formidable force in the consumer finance landscape. The acquisition underscores TVS Holdings’ strategic vision and commitment to delivering value to its stakeholders amidst evolving market dynamics.
As on 10 May, 2024 at 14:30 the shares of TVS holdings were trading at Rs 10, 256, up by 5.51%. The company has a market cap of INR 227.31 billion.
