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TVS Holdings to buy 80.7% stake in Home Credit India for ₹554 crore
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Home Credit will operate as a subsidiary of TVS Holdings, maintaining its brand identity and focus on its unique customer segment, while benefiting from the resources and support of TVS Holdings Group.
The board of TVS Holdings Ltd. has approved the acquisition of a 80.74% equity stake of Home Credit India Finance for ₹554 crore. The remaining 19.26% of the equity stake will be purchased by Premji Invest and other associates.
Upon signing of a sale and purchase agreement, TVS Holdings and Home Credit will proceed to obtain approvals from the Competition Commission of India and the Reserve Bank of India, respectively, for the proposed transaction, the company announced in an exchange filing.
This acquisition aligns with the strategy of TVS Holdings Group to play a leading role in deepening the financial penetration in India, the company said.
“Given the Group’s strength in financial services, there are several areas of synergies to be realised, including, collections, cost efficiencies, in-house digital and analytics capabilities, and cross-sell,” TVS Holdings said.
Home Credit will operate as a subsidiary of TVS Holdings, maintaining its brand identity and focus on its unique customer segment, while benefiting from the resources and support of TVS Holdings Group.
Sudarshan Venu, Managing Director of TVS Holdings said that Home Credit is a significant player in consumer financing with a lot of potential. “Together with TVS Credit, the Group will now have a lending book of ₹31,000 crore, taking us closer to our book-size goal of ₹50,000 crore in the next three years. Collectively, we will now be serving 3 crore financial services customers across more than 90,000 touch points pan India.”
“As an existing shareholder in TVS Credit, we are delighted to partner with TVS Holdings in the Home Credit India acquisition. We are confident that this acquisition will help the company accelerate scale and profitability and build significant value for all stakeholders,” said TK Kurien, Managing Partner, and Chief Investment Officer at Premji Invest.
Home Credit India, a part of the Home Credit Group, is an international consumer finance provider that has operations in multiple countries. Home Credit Group entered the Indian market in 2012. Since then, Home Credit has served over 1.6 crore customers in India, both online as well as offline.
Home Credit had an assets under Management (AUM) of ₹5,535 crore as of March 31, 2024. It has an employee base of 3,800 and a network of over 50,000 points-of-sale (PoS) spread over 625 cities across India. It focuses on New-to-Credit (NTC) customers, enabling them with consumer durable loans for low-cost smartphones, along with personal loans.
JM Financial was the exclusive financial advisor and Khaitan & Co was the legal advisor to Home Credit Group in India.
Shares of TVS Holdings Ltd. are trading with gains of 5.30% at ₹10,235.80 apiece on the NSE today.
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